What Is An Automatic Stay in Bankruptcy?
In Bankruptcy, an automatic stay protects a debtor from creditors.  The automatic stay prevents a creditor from collecting on debts incurred by the debtor.  The automatic stay is effective immediately upon the filing of the bankruptcy.  As soon as the bankruptcy is filed and a case number is obtained, creditors may no longer pursue judgments, garnishments, foreclosure proceeding, or repossessions.  Creditors also must cease all phone calls, letters, e-mails, and any other form of communication with the debtor.  It is not legal for them to continue attempts to collect on any debts.
However, secured creditors can ask the court for a motion for relief from the automatic stay.  A secured creditor has a claim on a debt that is secured by collateral, such as a mortgage on a home or a loan on a vehicle.  If a debtor is not current on their secured debts, the creditor can file a motion for relief.  When a motion for relief is filed, if the debtor does not become current or make arrangements with the secured creditor, the court can grant the motion for relief.  When that is granted, that gives the secured creditor permission to repossess or foreclose on the property.   The debtor is then no longer protected by the automatic stay from those particular creditors.
There are exceptions to the automatic stay.  For example, if a debtor is in a situation where their landlord gets a rent and possession judgment against them for rent before the filing of the bankruptcy, that is not protected by the automatic stay.  The automatic stay has certain limitations.  If a debtor has had more than one bankruptcy case pending in the one year prior to the filing of the current bankruptcy, their automatic stay is limited to 30 days.  The debtor would have to file a motion to extend the automatic stay in order for it to last the entirety of the bankruptcy, which would state why circumstances are different with this bankruptcy and that it was filed in good faith.  If two or more bankruptcies have been pending in the last year, there is no automatic stay.
If you would like to learn more about this issue or have any other questions, please contact a St. Louis or St. Charles attorney.