Legal Definitions - automatic stay

Automatic stay is a legal term that means when someone files for bankruptcy, most creditors are not allowed to collect money from them. This is called an "injunction." The automatic stay starts as soon as the bankruptcy petition is filed. However, some creditors can ask to be allowed to collect money if they think their property is not being protected well enough.

There are some exceptions to the automatic stay. For example, if someone owes rent to a landlord and the lease has already ended, the landlord can still evict them. Also, the government can still enforce its laws and regulations, like collecting taxes.

For example, if someone owes money to a credit card company and files for bankruptcy, the credit card company cannot try to collect the money during the automatic stay. However, if the person owes money on a car loan and is behind on payments, the lender can ask to be allowed to take the car back if they think their property is not being protected well enough.