What is an automatic stay?

An automatic stay is a legal protection that can be used to suspend creditors’ rights in California. It is a tool used by debtors (people who owe money) to protect themselves from creditors (people to whom they owe money). The automatic stay stops creditors from taking any action to collect the debt from the debtor. This includes filing a lawsuit against them, making collection calls, or garnishing their wages. It also prevents creditors from seizing the debtor’s property as part of the collection attempt. It is important to note that an automatic stay does not erase the debt. It simply stops the creditors from taking legal steps to collect the debt until the automatic stay is lifted. In California, the automatic stay lasts until the creditor receives a court order from a judge that allows them to continue their collection attempts. This protection is particularly useful for individuals who are overwhelmed by their debt and don’t know how to handle the situation. An automatic stay gives them time to catch their breath and look for a solution that works for them, be it a debt consolidation, a loan modification, or a bankruptcy filing.

Related FAQs

What is the meaning of “fraudulent transfer”?
Can a lien be enforced against a debtor’s property?
What is a void judgment?
What is a garnishment?
What is an automatic stay?
What is a discharge injunction?
What is the meaning of “creditors’ rights litigation”?
What are the different types of creditors?
What is equitable subordination?
What is a secured claim?

What is an automatic stay?

Related FAQs

Related Blog Posts