Bankruptcy petitions filed under Chapter 7, Chapter 11 or Chapter 13 Bankruptcy Section 362(a) of the Bankruptcy Code initiate an automatic stay which forces creditors to stop all collections actions against debtors including: harassing phone calls, repossessions, garnishment of wages, filing lawsuits and collecting fines and levies. The automatic stay gives the debtor time to catch their breath, and if they are filing Chapter 13 Bankruptcy, to complete a plan of debt repayment and submit it to the bankruptcy court.
Automatic stays for Chapter 13 Bankruptcy generally remain in effect until the debtor repays their debts and gets a discharge from the bankruptcy court or the property is determined not to be part of the debtor's estate. An automatic stay for Chapter 7 Bankruptcy may only be temporary. Creditors seeking payment for real property may request a motion to lift the automatic stay, and if for instance, a home was in foreclosure, the lift of the automatic stay will allow the creditor to continue their foreclosure proceedings. Lifting the automatic stay also allows creditors to proceed with debt collections for liabilities which are not protected by filing for bankruptcy protection. Talk to a bankruptcy attorney about liabilities which can not be discharged by filing bankruptcy and whether or not it is best to file Chapter 7 Bankruptcy or Chapter 13 Bankruptcy.