What is the Automatic Stay?

The Automatic Stay is a court order that is put into place once a bankruptcy petition is filed. It immediately stops most actions against a debtor and their property by creditors. The Automatic Stay is designed to give debtors protection from further collection activities by creditors. In North Carolina, the Automatic Stay stops creditors from continuing with existing lawsuits, from repossessing property, from garnishing wages, from attempting to collect on debts, and from calling or writing to the debtor. The Automatic Stay also stops utility companies from cutting off the debtor’s service. It stops foreclosures from happening or being continued and it stops wage garnishments. The Automatic Stay is an important part of the bankruptcy process and provides debtors in North Carolina with relief from creditors attempting to collect. The Automatic Stay is put into effect when a petition is filed and will remain in effect until the court order is lifted or until the debt is discharged. Creditors cannot take any action against a debtor while the Automatic Stay is in effect. If a creditor attempts to do so, they may be held in contempt of the court and required to pay damages.

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What is the Automatic Stay?

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