What is the automatic stay?
The automatic stay is temporary court order you receive upon filing the case that fends off creditors collection attempt. It becomes permanent at the end of the case in the form of the discharge injunction.
Virtually all debt collection attempts are stopped with the filing of the case (although certain debts like alimony and spousal support payments continue).
The automatic stay is the pressure relief valve, and often time for my client, it’s the first sign of peace to come they can actually feel the result of.
Typically, within a few days of filing a bankruptcy case:
1. Collection calls stop
2. Collection letters stop
3. Lawsuits are on hold
4. The phone stop ringing
5. Tension begins to subside
I tell my clients that you know your case is filed because, within a week, the collection letters turn into offer for new credit cards and car loan offers. It’s like a light switch. The collectors know you are out of debt, so the credit card companies try to bring you back in.
It is an extremely predatory practice, but nonetheless, a practice that occurs. I strongly suggest ignoring new offers for credit after bankruptcy.