One of the most immediate and impactful benefits of bankruptcy is the automatic stay—a legal mechanism that halts most collection efforts as soon as you file your bankruptcy petition. Whether you’re facing wage garnishment, foreclosure, or constant creditor calls, the automatic stay can provide instant relief.
What Is the Automatic Stay?
The automatic stay is a federal court order that takes effect the moment someone files a bankruptcy case, prohibiting most creditors from continuing with collection activities, including lawsuits, garnishments, and foreclosures. It applies in both Chapter 7 and Chapter 13 bankruptcy cases.
The automatic stay remains in place throughout most of the bankruptcy process unless the court lifts it at a creditor’s request or dismisses the case.
What Does It Prevent?
The automatic stay provides broad protection against a wide range of creditor actions, including:
- Wage garnishments – Stops ongoing garnishment of paychecks.
- Lawsuits – Halts most civil lawsuits seeking to collect a debt.
- Foreclosure – Puts a pause on foreclosure proceedings.
- Utility disconnections – Temporarily prevents disconnection of essential utilities like gas, water, and electricity.
- Repossession – Prevents creditors from repossessing vehicles or other property.
- Collection calls and letters – Stops creditor harassment.
In many cases, this breathing room gives the filer time to reorganize finances or work out payment plans through the bankruptcy process.
What Doesn’t It Cover?
While the automatic stay is powerful, it does not stop every type of action. For example:
- Criminal proceedings such as restitution or fines continue.
- Child support and alimony obligations are generally not paused.
- IRS audits or demands for tax returns may proceed, although collection actions like levies are paused.
- Multiple bankruptcies filed in a short time may result in a shortened or limited stay.
If you’ve filed for bankruptcy within the last year and had a case dismissed, the stay may only last 30 days unless extended by court order.
Lifting the Automatic Stay
In certain situations, a creditor may request that the court lift the stay. This often happens in:
- Foreclosure cases, where the mortgage lender wants to continue proceedings.
- Vehicle loans, especially if you’re behind on payments and not reaffirming the debt.
If the court grants relief from the stay, the creditor can resume collection actions on that specific debt.
How Long Does the Automatic Stay Last?
The stay usually remains in effect until:
- The case is discharged (successfully completed) or dismissed
- The court lifts the stay for a specific creditor, or
- The debtor fails to comply with bankruptcy rules.
In Chapter 7 cases, this may be just a few months. In Chapter 13, the stay typically remains in effect for the entire 3–5 year repayment plan period, provided that payments are made on time.
Oklahoma Bankruptcy Lawyers Can Help
If you’re struggling with debt and need fast relief from creditors, bankruptcy may be a powerful option. Get a Free consultation from a Tulsa County Lawyers Group bankruptcy attorney by calling 918.379.4864. Or you can ask an online bankruptcy question by following this link.
