What is the automatic stay?
The stay prevents creditors from taking any additional action against a debtor. Foreclosures are stopped. Car repossessions cannot occur. Wage garnishments are halted. Lawsuits are stayed. Any debt that occurred prior to the filing of the bankruptcy petition cannot be collected. In sum, creditors are stopped dead in their tracks.
The stay is automatic and occur immediately upon filing of the bankruptcy petition. In addition, any action taken in violation of the stay is typically void. According to the legislative history of this critical bankruptcy section one purpose of the stay is to provide a debtor some breathing room.
The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors.
H.R. Rep. No. 595, 95th Cong., 1st Sess. 340 (1977). There are many exceptions to the automatic stay, however. These include criminal proceedings, child support, and child custody. If you need to know whether a specific situation is automatically stopped as soon as you file bankruptcy, check with your bankruptcy lawyer.