What is an automatic stay in a chapter 7 bankruptcy?
Jan Meriss Alfonso Assistant at Ascent Law LLC A bankruptcy stay protects property and other assets from a creditor's creditors, but the automatic stay can be lifted in some circumstances. For example, it may lift if you owe rent to a landlord or have improperly used a property. But the automatic stay can also be lifted for reasons unrelated to bankruptcy. Relief from an automatic stay in a chapter 7 bankruptcy A bankruptcy automatic stay prohibits most actions against a debtor and his or her property from taking effect until the debtor files for bankruptcy. These actions include lawsuits, foreclosure actions, garnishments, and more. The purpose of this stay is to protect the debtor's property and give him or her a break from litigation. Once the automatic stay takes effect, creditors must prove a cause to lift the stay before they can begin pursuing the debtor. Creditors can also seek relief from the automatic stay if they intend to continue collecting from the debtor during...