• James D. Lynch

What is an Automatic Stay?

When a debtor files for bankruptcy, a court order called the "automatic stay" acts as an automatic injunction that halts collection actions taken by a creditor to collect debts from the debtor. Once the automatic stay begins, creditors can not:

● seize or file a lien against the debtor's property

● file a civil lawsuit against the debtor

● cut off the debtor's utility service

● evict the debtor

● foreclose on the debtor's mortgage

There are some instances where the automatic stay does NOT stop collection activity:

● criminal proceedings (e.g. you will still be required to pay fines that were assessed as a punishment or writing a bad check)

● collection of alimony and child support

● The IRS can still conduct an audit, demand tax returns, and issue tax assessments and tax deficiency notices. But the automatic stay does temporarily stop the IRS from issuing liens or seizing the debtor's property or income.

The automatic stay begins at the moment the petition for bankruptcy is filed, and it applies to creditors whether they know about the bankruptcy or not. Willful violations of the automatic stay can result in damages, attorney fees, and even punitive damages.

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Law Office of James D. Lynch, PLLC

3000 Joe Dimaggio Blvd #90, Round Rock, TX 78665


(512) 745-6347

(714) 745-3875

©2020 by Law Office of James D. Lynch, PLLC. The information contained in this website is for informational purposes and is not to be considered legal advice.  Any correspondence between you and the Law Office of James D. Lynch is not intended to create an attorney-client relationship.  Please do not send confidential information to us until after an attorney-client relationship has been established by an engagement letter signed by the proposed client and our attorney.