If you’re facing overwhelming debt and are thinking about filing for bankruptcy, one of the most powerful protections available to you is the automatic stay. Whether you file under Chapter 7 or Chapter 13, the automatic stay can give you immediate relief from creditors and a chance to breathe.
What Is the Automatic Stay?
The automatic stay is a federal court order that goes into effect the moment you file for bankruptcy. It temporarily halts most collection efforts, including:
- Lawsuits and judgments
- Foreclosure or repossession
- Wage garnishments
- Creditor phone calls and letters
- Utility disconnections
- Bank account levies
In most cases, the stay lasts for the duration of your bankruptcy, unless the court lifts it or dismisses your case.
How Does It Work in Cherokee County?
When you file for bankruptcy in U.S. Bankruptcy Court for the Eastern District of Oklahoma, which covers Cherokee County, the court notifies your creditors of the filing. Once they receive notice, they must immediately cease all collection actions or face penalties.
If a creditor continues to pursue collection despite the stay, they may be held in violation of federal law, and you may be entitled to damages or sanctions.
What Debts Fall Under the Automatic Stay?
Most types of debt collection are temporarily stopped by the automatic stay, including:
- Credit cards
- Medical bills
- Personal loans
- Payday loans
- Repossessions
- Mortgage foreclosure
However, some actions do not fall under the automatic stay, such as:
- Criminal proceedings
- Child support enforcement
- IRS audits or tax assessments (though collection is paused)
How Long Does the Stay Last?
- In a Chapter 7 case, the stay usually lasts until the case is closed, dismissed, or the debt is discharged—generally 3 to 5 months.
- In Chapter 13, the stay may remain in place for the entire 3- to 5-year repayment period, as long as you comply with your payment plan.
If you have filed for bankruptcy more than once in the past year, the court may limit or deny the stay, so it’s important to speak with a bankruptcy attorney if this applies to you.
What If a Creditor Tries to Lift the Stay?
In some cases, a creditor (like a mortgage lender or auto finance company) may file a motion for relief from stay, asking the court to allow them to resume foreclosure or repossession. You’ll have a chance to oppose the motion in court, especially if you can show you’re catching up on payments or protecting the asset in another way.
Tahlequah Bankruptcy Attorneys
The automatic stay can give you powerful protection, but it’s just one part of the bankruptcy process. If you’re ready to get a fresh start, we’re here to help. Our team has helped individuals and families across Tahlequah navigate the bankruptcy process with compassion and confidence. For a free consultation with a Tahlequah bankruptcy lawyer, call us at 539-867-2321 or follow this link to ask a free legal question.