When you file for bankruptcy in Oklahoma, one of the most powerful protections you gain is the automatic stay. This legal protection takes effect immediately upon filing and stops most creditors from taking further action against you. For many people, the automatic stay provides instant relief from overwhelming debt collection efforts.
What Does the Automatic Stay Do?
The automatic stay acts as a court order that freezes most collection efforts, including:
- Stopping wage garnishments.
- Preventing foreclosure proceedings.
- Halting vehicle repossessions.
- Suspending lawsuits related to debt collection.
- Ending harassing phone calls and collection notices.
This breathing room gives debtors time to reorganize their finances under Chapter 13 or discharge qualifying debts under Chapter 7 without the immediate threat of losing property.
When Does the Automatic Stay Begin?
The automatic stay begins the moment you file a bankruptcy petition in federal bankruptcy court. Creditors legally have to stop collection activities once they receive notice, and violations can result in penalties against them.
Are There Exceptions?
The automatic stay doesn’t stop all collection actions. Some exceptions include:
- Child support or alimony – Collection efforts for domestic support obligations may continue.
- Criminal proceedings – Bankruptcy does not stop criminal cases or fines.
- Certain tax proceedings – The IRS may still audit or assess taxes, though it cannot seize property without court approval.
How Long Does the Automatic Stay Last?
- In Chapter 7 bankruptcy, the stay lasts until the case is closed, dismissed, or a discharge is granted (usually a few months).
- In Chapter 13 bankruptcy, the stay remains in place throughout the repayment plan, which may last three to five years.
If you have filed for bankruptcy before, the stay may be limited in duration or may not go into effect without special permission from the court.
What Happens If a Creditor Violates the Stay?
Creditors who knowingly violate the automatic stay may face serious consequences, including fines and liability for damages. If a creditor continues collection efforts after your case is filed, you should notify your attorney immediately.
Oklahoma City Bankruptcy Lawyers
The automatic stay can be a lifeline for those struggling with overwhelming debt. If you are considering bankruptcy and want to know how the automatic stay could help you, our bankruptcy team at OKC Attorneys can help. Call us today at 405-367-8710 or ask a question online.
