Automatic stay · Beverly Hills
The Automatic Stay: What Stops the Moment You File
The automatic stay stops most collection the moment you file bankruptcy, including lawsuits, wage garnishments, bank levies, foreclosure sales, repossessions and collection calls. It comes from federal law, 11 U.S.C. section 362, and it has limits. Call (310) 362-9071 if a sale, levy or court date is close, because we handle emergency filings.
- Starts the moment your case is filed, with no court order needed
- Applies in Chapter 7 and Chapter 13
- Some actions are not stopped, like criminal cases and child support
- Repeat filers may get a shorter stay or none at all
At a glance
What the automatic stay stops
The automatic stay stops almost every way a creditor can collect a debt you owed before filing. Section 362(a) of the Bankruptcy Code lists them. In plain words, creditors must stop:
- Starting or continuing a lawsuit against you over a debt from before filing.
- Enforcing a judgment, including wage garnishments and bank levies.
- Taking or controlling your property, including repossessing a car or holding a foreclosure sale.
- Creating, recording or enforcing a lien against your property.
- Any act to collect a debt from before filing, including calls, letters and texts.
- Setting off a debt against money the creditor owes you, with some exceptions.
- Starting or continuing a case in the U.S. Tax Court about your taxes.
If you were served with a lawsuit, the stay pauses it right away. See our page on being sued by a debt collector.
How creditors learn you filed
Creditors learn you filed through notices from the bankruptcy court and from us. The stay applies the moment you file, whether or not a creditor knows yet. But a creditor who has not heard may keep going until it does.
The court mails a notice of your case to every creditor on your schedules. When timing is tight, we do not wait for that. We file a notice of bankruptcy in any state court lawsuit. When a foreclosure sale, levy or garnishment is set, the case number can be sent straight to the lender, the foreclosure trustee or the levying officer.
If you still get a call after filing, give the collector your case number and our phone number. Write down the date, time and name of the caller.
What the stay does not stop
The stay does not stop everything. Section 362(b) lists exceptions. The most common ones are:
| Not stopped | What that means for you |
|---|---|
| Criminal cases | A criminal case goes forward, even if it involves a debt. |
| Family law matters | Paternity, setting or changing support, custody, visitation, divorce (except dividing property) and domestic violence cases go on. |
| Support collection | Child support and alimony can still be collected from income withholding and from property that is not part of the case. |
| Some evictions | If the landlord got a judgment for possession before you filed, the eviction can usually continue. A narrow 30-day exception may apply if state law lets you cure and you deposit rent with the court. Evictions based on endangering the property or illegal drug use are not stopped either. |
Repeat filers and motions for relief
One case dismissed in the past year. If you had one bankruptcy case pending in the year before and it was dismissed, the stay ends as to you on the 30th day after your new filing. You can ask the court to extend it, but the motion must be heard within those 30 days and you must show good faith.
Two or more cases dismissed in the past year. The stay does not go into effect at all. You can ask the court within 30 days to impose it, again on a showing of good faith. Read more on refiling a dismissed bankruptcy.
Motions for relief. A creditor can ask the bankruptcy judge to lift the stay. Common reasons are that you are not making payments on a car or home and the creditor is not protected, or that you have no equity in the property and do not need it to reorganize. We respond to these motions when there is a defense.
When the stay ends. The stay generally ends when your case is closed or dismissed, or when you receive a discharge. After a discharge, a separate court order bars collection of discharged debts for good.
Violations and what to watch for
A creditor who knows about your case and keeps collecting may be violating the stay. Under section 362(k), if you are hurt by a willful violation, you can recover actual damages, including costs and attorney's fees. In some cases, the court can also award punitive damages.
- Waiting until the last day. You must complete a credit counseling course before filing, even in an emergency. Take it now if a sale or levy is coming.
- Assuming the stay is permanent. It is temporary. The discharge is what ends the debt.
- Ignoring a creditor who keeps calling. Keep records. A violation can be worth raising with the court.
What it costs
- Chapter 7: flat attorney fee from $1,200, plus the $338 court filing fee
- Chapter 13: attorney fee quoted in writing, and part of it can be paid through the plan
- Payment plans are available, and the first consultation is free
More on lawsuits and collections
Automatic stay questions
How fast does the automatic stay start?
The automatic stay starts the moment your bankruptcy petition is filed. No hearing or court order is needed.
Does the automatic stay stop a foreclosure sale?
Yes, the automatic stay stops a foreclosure sale if you file before the sale happens. The lender may later ask the court for relief. See how to stop a foreclosure in Beverly Hills.
Does the automatic stay stop wage garnishment?
Yes, the automatic stay stops a wage garnishment for a debt from before filing. Your employer must stop withholding once it learns of the case. Child support garnishments are an exception.
Does the automatic stay stop an eviction?
The automatic stay stops some evictions but not all. If the landlord already has a judgment for possession, the eviction usually continues, subject to a narrow exception.
What if a creditor ignores the automatic stay?
If a creditor ignores the automatic stay after learning of your case, you may be able to recover damages and attorney's fees. Tell us right away. Read more on our guide to stopping creditor lawsuits.
Free consultation
Stop collection the day you file
Call (310) 362-9071 or send the form. If a sale or levy date is set, tell us the date when you call.
Law Offices of John Asuncion9454 Wilshire Blvd., Penthouse Floor
Beverly Hills, CA 90212
(310) 362-9071
Monday to Friday, 9 a.m. to 6 p.m.