Automatic Stay in Bankruptcy

: Reese Baker & Associates

  Filed under: Debt

An automatic stay in a United States bankruptcy case stops all actions by your creditors trying to collect on a debt once your bankruptcy petition has been filed.

An automatic stay allows you some relief from the constant phone calls and worrying if your car will be repossessed or you and your family will be kicked out of your home.

All Efforts to Collect Stop

By law creditors are prohibited from contacting you regarding your debt, all legal proceedings will stop including liens, repossessions, and wage garnishments. If a creditor continues to try to contact you, they may be subject to fines and penalties.

Secured creditors may petition the bankruptcy court to get around the automatic stay and take action to get the collateral property back. If the creditors can prove that that the property is not being protected, then the creditors will either get cash payments or an additional lien on the property.


If eviction proceedings began before the bankruptcy and the landlord received a judgment against the tenants, the eviction process may continue and not be affected by the automatic stay. If eviction proceedings are filed after bankruptcy, they will be allowed to proceed if the reasons are from illegal substances or if the tenants are damaging the property. Otherwise, the tenants will be allowed to stay until the courts resolve the bankruptcy.

The automatic stay does not preclude you from still paying any alimony or child support payments due, and your mortgage and car payments if you decide to continue to keep your home and vehicle.

If you are being harassed about late payments and are considering bankruptcy to get debt relief, contact a Houston bankruptcy attorney to find out what options you may have.