Most, if not all, debtors are relieved to learn that immediately upon filing their bankruptcy petition, their creditors are stopped from taking any further action against them, including harassing telephone calls, threatening letters, garnishments, and frozen bank accounts, because of the automatic stay provision of the United States Bankruptcy Code. This protection, which appears at Section 362(d) of the Code, gives the debtor a much-needed break from the financial pressure and emotional stress which may result after a prolonged period of financial instability.

Perhaps the single most significant effect of the automatic stay is that any and all civil litigation against you must stop at once and judgment cannot be entered against you. Most importantly, this protection includes foreclosure proceedings when you file a petition under Chapter 13. In plain English, this means you are no longer in danger of losing your home.

Additionally, if your bank account has been frozen, the automatic stay that arises upon filing your bankruptcy petition will force the bank to re-open your account. You will be able to safely resume direct-deposit of your salary into your account without any threat of your creditors seizing funds overnight.

There are very few outright exceptions to the automatic stay provision. However, there may come a time after your petition is filed when a creditor moves before the United States Bankruptcy Court for relief from the automatic stay in order to resume, or initiate, proceedings against you. When this happens, a skilled professional will be needed to further protect your interests.