Automatic Stay

The bankruptcy-filing protection that immediately halts most creditor collection actions, including lawsuits and garnishments.

The moment you file for bankruptcy, something called the automatic stay kicks in — instantly, no separate court order needed. It stops almost everything creditors can throw at you: lawsuits, wage garnishment, bank levies, repossession, foreclosure, most collection calls and letters. If a creditor keeps coming after you once they know about the stay, they can be held in contempt of court and made to pay you damages for it.

It’s not a total shield, though. It doesn’t touch criminal cases, most child support or alimony collection, or certain tax matters. And a secured creditor — your mortgage lender or car lender — can still ask the court for permission to move forward with repossession or foreclosure if you’re not keeping current on that specific loan. If you’ve had a bankruptcy case dismissed in the last year, you might only get a shortened 30-day version of this protection instead of the full thing.

If you’re staring down a garnishment date, a repossession, or a foreclosure sale, this is often the whole reason to file before that date instead of after — once something’s already happened, the stay can’t undo it. Timing here genuinely matters.