After I file, what happens to my creditors' collection activities against me?
Once the petition is filed with the court, the automatic stay will go into effect. The automatic stay is an injunction that automatically stops lawsuits, foreclosure, garnishments and all collection activity against you by your creditors for any debt which arose before the filing of the bankruptcy.
Note: There are exceptions which may result in the automatic stay not going into effect, or being limited in duration.
Some exceptions, but not all, are listed below:
- Debtor had a previous case pending within the preceding one-year period, but the case was dismissed. In this situation, the automatic stay would terminate on the 30th day after filing the new case, unless the debtor applies for an extension of the automatic stay.
- Debtor had more than one previous case pending within the preceding one-year period, but the cases were dismissed. In this situation, the automatic stay does not go into effect unless the debtor applies for imposition of the stay.
A creditor may file a Motion to Lift the Automatic Stay, which is a request by a creditor that, if granted, would allow the creditor to collect a debt against a debtor or the debtor’s property that would otherwise be prohibited by the automatic stay.