The Automatic Stay
When you file a bankruptcy the Court imposes an automatic stay on all actions against you, with certain exceptions. Any one who has what is called a claim, or cause of action for damages, can no longer pursue you for those particular damages until the stay is lifted. Thus, if you owe alot of money on a credit card, when you file bankruptcy the credit card company is no longer permitted to come after you. This happens when you file the initial paperwork, and as long as the paperwork is filled out properly and the action is not dismissed, this stay will last for approximately 3 to 4 months in a Chapter 7 case, and even longer in a Chapter 13 case.
The Bankruptcy Courts have the power to impose these measures pursuant to federal statutes and the supremacy clause when dealing with state courts.
There are exceptions to the automatic stay, usually involving a request to preliminarily lift the stay.
The automatic stay can be very useful for those who are attempting to calm the waters and get their lives back together through the bankruptcy process, and most importantly it stops those annoying phone calls!
