What is the bankruptcy automatic stay?

The bankruptcy automatic stay is a Federal law found in the Bankruptcy Code. It stops listed debt collection efforts and actions. In Delaware, the automatic stay is effective against most attempts to collect a debt, including the filing of a lawsuit, garnishment of wages, repossession, foreclosure, and other debt collection efforts. The automatic stay also prohibits creditors from making contact with the debtor, either directly or indirectly, in an effort to collect a debt that has been discharged in the bankruptcy proceeding. Creditors cannot call, email, write, or otherwise contact the debtor in an attempt to collect a discharged debt. The automatic stay is designed to give the debtor a chance to get back on their feet. It provides respite from creditors and gives debtors a chance to get their finances in order. This allows debtors to focus on repaying the debts that can be repaid and discharging those that cannot be paid in full. In Delaware, the automatic stay will remain in effect until the bankruptcy case is closed or the court issues an order modifying or lifting the stay. The stay can also be extended if necessary for debtors to take advantage of the protections granted in the Bankruptcy Code.

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What is the bankruptcy automatic stay?

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