THE AUTOMATIC STAY – BANKRUPTCY PROTECTION
CAN I STOP FORECLOSURE AND LAWSUITS??
Yes! Filing a bankruptcy petition “automatically stays” (stops) most collection actions against the debtor or the debtor’s property. 11 U.S.C. § 362. It will stop mortgage foreclosure actions and sales. This is why you sometimes hear people say that they filed for bankruptcy protection. The protection they are referring to is the stay. Filing the petition does not, however, stay certain types of actions listed under 11 U.S.C. § 362(b), and the stay may be effective only for a short time in some situations. The stay arises by operation of law and requires no judicial action. Unlike with an order to show cause and a TRO, the debtor does not need to make a motion to obtain the automatic stay. That is why it is called “automatic.” As long as the stay is in effect, creditors generally may not initiate or continue foreclosure, collection actions, lawsuits, wage garnishments, or even make telephone calls demanding payments. Debtors can stop abusive and harassing bill collectors. The bankruptcy clerk gives notice of the bankruptcy case to all creditors whose names and addresses are provided by the debtor. Creditors may make a motion to terminate the stay. This is also called a motion to modify, vacate or obtain relief from the stay