During the bankruptcy process, clients often wonder what does "Automatic Stay" mean?
Section 362 of the U.S. Bankruptcy Code includes a rule called the “automatic stay.” The automatic stay immediately stops creditors from collecting debts. This automatic stay begins immediately when the bankruptcy is filed. This can be incredibly beneficial for the person filing for bankruptcy. If a creditor attempts to collect on a debt that the debtor is protected by the automatic stay, that creditor is in violation of the court order and may be responsible to pay the debtor for damages.