What is the bankruptcy automatic stay?

The bankruptcy automatic stay is a legal order issued by the courts when someone files for bankruptcy protection. It prevents creditors from taking actions to collect on a debt. In California, the bankruptcy automatic stay applies to all types of bankruptcy cases, including Chapter 7 and Chapter 13. The bankruptcy automatic stay prohibits creditors from doing the following: calling or sending letters to collect a debt, filing or continuing a lawsuit, garnishing wages, repossessing property, and foreclosing on a property. This protection helps those who are struggling with financial obligations because it prevents creditors from demanding payment. The bankruptcy automatic stay is not indefinite. The court can lift the stay when a creditor requests it, such as if the debtor has an unpaid debt that the court believes should be paid. The court can also lift the stay if the debtor makes their payments on time. Additionally, the stay can be modified so that certain debts can still be collected on. It is important to understand that the bankruptcy automatic stay is only temporary and can be modified or lifted at any time. As a result, it does not completely protect debtors from creditor actions. It is also important to know that some debts, such as child support and alimony payments, are not affected by the bankruptcy automatic stay.

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What is the bankruptcy automatic stay?

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