What is an automatic stay?
A San Diego bankruptcy lawyer provides information on the Automatic Stay...
What is an automatic stay?
An automatic stay is that which prevents, by law, any collection efforts during a pending bankruptcy. To elaborate, the automatic stay is both automatic and a stay. The automatic stay is automatic in that as soon as you file your bankruptcy and a case number is generated by the court, the stay goes into effect. You need not take any other actions. You need not even notify your creditors yourself (the court will do that). The stay is instantaneously created and is in full force and effect as soon as your case begins. This is how the automatic stay is automatic. The automatic stay is also “a stay.” Now, in non-legal conversations, the term “stay” is verb which means to not move, more or less. In legal terms, a stay is a noun which means basically that which puts everything on hold. A stay might be used by a governor granting a “stay of execution” for a prisoner on death row. This means, the execution is on hold. Similarly, the automatic stay in a bankruptcy means all collection efforts – garnishment, lawsuits, levies, etc. – are on hold. It even applies to the creditors contacting you by phone to discuss (or annoy you about) the debt. This status remains until your case is concluded, usually in a successful discharge of the debts themselves. The automatic stay is powerful tool and offers debtors tremendous relief.
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