When a bankruptcy petition is filed with the bankruptcy court, the bankruptcy court immediately issues an order called an “automatic stay.” This order requires creditors, debt collectors, and their attorneys to “stay put” and, thus, to end all collection efforts against the bankruptcy filer and his or her property.
Prohibited collection actions are listed in the Bankruptcy Code (11 U.S.C. § 362). Common examples of prohibited actions that must stop include:
Contacting the debtor by telephone, mail, or otherwise to demand repayment;
Taking actions to collect money or obtain property from the debtor;
Repossessing the debtor’s property; and
Starting or continuing lawsuits or foreclosures.
Under certain circumstances, the stay may be limited to thirty days or not exist at all. However the debtor can request the court to extend or impose a stay. Nevertheless, in most cases, the automatic stay continues until the bankruptcy case is completed. By that time the case is closed, the debtor and creditors will, in most cases, have received a permanent court order called “Discharge of Debtor.” Such discharge order requires the creditors to forever cease and desist from attempting to collect any discharged debt against you.
For a free and confidential consultation contact Christian bankruptcy attorney Matthew B. Tozer.
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