What is the automatic stay in bankruptcy and what does it stop?

The automatic stay is a powerful protection that kicks in the moment you file bankruptcy. It legally halts most collection activity: creditor calls and letters, lawsuits, wage garnishments, bank levies, foreclosure sales, and repossessions must all stop immediately. This breathing room is one of the biggest reasons people file when collections spiral out of control. There are limits: it doesn't stop most child support or alimony actions, certain tax matters, or criminal proceedings, and creditors can ask the court to lift the stay for secured property like a house in foreclosure. If a creditor keeps trying to collect after you file, that's a violation and you may be entitled to damages. Notify collectors of your case number promptly.