The Automatic Stay is an injunction automatically issued by the bankruptcy court when a debtor files for bankruptcy.
The Automatic Stay stops:
- Phone calls letters
- Most other collection activity
The Court’s goal in a bankruptcy is to take a picture of your finances on the date of filing and then either liquidate unexempt property in a Chapter 7 Bankruptcy or allow you to set up a payment plan in a Chapter 13 Bankruptcy to get current on any arrearages. The Automatic Stay keeps things the way they are until the Court can make its final determination.
The Automatic Stay is replaced by the Discharge Order upon successful completion of your Bankruptcy Case.