What is the automatic stay?
June 28, 2022
By Diane Drain Attorney & Retired Law Professor
When a bankruptcy petition is filed, a federal restraining order known as the automatic stay prevents any creditor, collection agency, or government institution from pursuing trustee sales, foreclosures, garnishments, lawsuits, or repossessions against the debtor and his or her property. Attempting to collect money, evict the renter, garnish wages, or execute a trustee’s sale, foreclosure, or repossession without first receiving authorization from the bankruptcy court is a violation of the federal restraining order. An Order for Relief from the Automatic Stay is the name for this type of authority. Disobedience to the automatic stay can result in a hefty fine.
About the Author: Diane Drain
Diane is a well respected Arizona bankruptcy and foreclosure attorney. As a retired law professor, she believes in offering everyone, not just her clients, advice about bankruptcy and Arizona foreclosure laws. Diane is also a mentor to hundreds of Arizona attorneys.
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