automatic stayn.
Reviewed by Owen Hathaway, AttorneyUpdated June 1, 2026The court order that takes effect the instant a bankruptcy is filed and immediately stops most collection efforts such as calls, lawsuits, garnishments, and foreclosures.
The automatic stay is an injunction that arises automatically the moment a bankruptcy petition is filed. It immediately halts most collection activity: creditor calls, lawsuits, wage garnishments, repossessions, and foreclosure proceedings.
The stay gives the debtor breathing room and is one of bankruptcy's most powerful protections. Creditors who knowingly violate it can face sanctions. Certain actions are excepted, and creditors can ask the court to lift the stay in specific situations.
Federal law governs the automatic stay (11 U.S.C. § 362), applying identically in the Districts of Colorado and Wyoming. Even when bankruptcy is not the ultimate goal, the ability to invoke the stay gives meaningful leverage with aggressive creditors.
Related terms
- Chapter 7The most common form of bankruptcy: eligible debts are wiped out in a few months, with exemptions protecting most or all of an honest debtor's property.
- Chapter 13A bankruptcy that reorganizes debt into a three-to-five-year repayment plan — used to keep a house, catch up on arrears, or when income is too high for Chapter 7.
- dischargeThe court order that legally wipes out a debtor's personal liability for covered debts, and it is the goal of most bankruptcies and the heart of the fresh start.