Getting immediate protection from your creditors heads the list of goals for most bankruptcy filers.
But, if this isn’t your first bankruptcy case, do you get that protection?
What the automatic stay does
The Automatic Stay (or “Stay”) protects the bankrupt consumer from continuing collection actions by his or her creditors. All creditors are required to cease all actions intended to collect a pre-petition debt from the Debtor. See 11 United States Code section 362.
The stay (1) halts a foreclosure sale, (2) stops and eviction, (3) stops an ongoing lawsuit, and (4) gives the Debtor some ‘breathing room’ and allows them to reorganize their financial affairs while under the protection of the bankruptcy court.