The automatic stay is an Order issued by the ... Bankruptcy Court when you file your bankruptcy case. It is issued automatically pursuant to the bankruptcy code, thus the “automatic” part, and it “stays” or stops all collection efforts against you and your stuff.
If your wages are being garnished, the automatic stay stops that. Immediately. If your house is set to be foreclosed down at the ... courthouse steps at noon today, and you file bankruptcy at 11:30, the automatic stay stops it. If you are being sued, the automatic stay stops it. And the one most people love – if your phone is ringing off the hook all day long – IT STOPS IT!
The automatic stay is one of the most powerful of all bankruptcy tools. It gives you a chance to catch your breath, evaluate your position, and determine a plan forward. It takes away much of the fear and stress of your current situation. You will actually be able to answer your phone. You won’t have to worry that the knock on the door is a process server dropping off the next law suit. The automatic stay can literally help bring peace back into your life.