When someone files for bankruptcy relief, a powerful law instantly goes into effect nationwide that is called the "automatic stay". Think of the automatic stay as an invisible force field placed around a debtor (along with his assets) the moment a bankruptcy case is filed. The automatic stay makes it illegal for creditors who learn (or should have learned) of a bankruptcy to call that debtor, harass that debtor, seek to collect a debt against that debtor, sue that debtor, maintain most previously-filed suits against that debtor, or seek to repossess that debtor's property without leave of court. Subject to certain exceptions, the automatic stay halts or "stays" litigation in other courts.
In certain situations, creditors have the right to ask a bankruptcy court for relief from the automatic stay in order that they can repossess their collateral, such as when a lender files a "Motion for Relief from the Automatic Stay" to foreclose on a home. This subject is discussed in greater detail later in this website.
Contact the Simpson Law Firm at (703) 548-3900 and talk to an attorney who has handled hundreds of cases dealing with the Automatic Stay.