One of the most powerful tools in Oklahoma bankruptcy is the automatic stay. This legal protection goes into effect immediately after someone files a bankruptcy petition and stops most collection efforts against the filer. Here’s what you’ll need to know about how it can impact you and your case.
What Is the Automatic Stay?
The automatic stay is a court order that takes effect as soon as a bankruptcy petition is filed under either Chapter 7 or Chapter 13. It prohibits creditors from continuing or starting most collection actions against you. This includes phone calls, lawsuits, wage garnishments, and even foreclosure proceedings in most cases.
The purpose of the automatic stay is to give you breathing room while the bankruptcy court evaluates your financial situation and determines how your debts will be resolved.
What Does the Automatic Stay Stop?
The automatic stay can provide relief from a wide variety of creditor actions, including:
- Lawsuits: Stops most civil collection cases already filed against you.
- Wage Garnishments: Halts wage garnishment, allowing you to take home your full paycheck.
- Foreclosure & Repossession: Temporarily stops foreclosure or vehicle repossession, although the creditor can ask the court for permission to continue.
- Utility Shut-Offs: Prevents utility companies from shutting off service for at least 20 days.
- Collection Calls: Prohibits creditors from calling, sending collection letters, or otherwise contacting you about your debts.
Is There Anything It Doesn’t Cover?
While the automatic stay is broad, it does have limitations. It generally does not stop:
- Criminal proceedings.
- Child support or alimony collection.
- Certain tax proceedings by the IRS.
- Loans or payments that are not dischargeable under bankruptcy law.
Additionally, if you’ve filed multiple bankruptcies within a short time frame, the stay may last only briefly or may not go into effect at all without court approval.
How Long Does the Automatic Stay Last?
In most cases, the automatic stay remains in effect until:
- Your bankruptcy case is closed or dismissed, or
- The court grants a creditor’s motion to lift the stay (for example, to continue foreclosure proceedings).
In Chapter 7 cases, this often means the stay lasts only a few months until the court discharges your debts. However, in Chapter 13 cases, it can last for three to five years while you complete your repayment plan.
Why the Automatic Stay Matters
The automatic stay is one of the main reasons people choose to file bankruptcy, as it provides immediate relief from financial stress and aggressive collection actions. It can give you time to work with your attorney and the court to develop a financial solution without the pressure of losing your paycheck or your home right away.
Wagoner Bankruptcy Attorneys
We help individuals and businesses understand their options under bankruptcy law, including how to use the automatic stay to their advantage. Whether you’re facing foreclosure, garnishment, or overwhelming debt, our team at Wagoner County Attorneys is here to give you the answers you need to your debt issues. For a free consultation, call us today at 918-283-7394, or reach out to us on our Ask A Lawyer page.
