Definition:
The automatic stay goes into effect when you file bankruptcy. The stay prevents creditors and collectors from trying to collect debts from you. They can’t call you, send letters, or sue you as long as the automatic stay is in effect.
Creditors can, in some instances, file a Motion to Lift Stay requesting the bankruptcy court lift the automatic stay in your case and allow them to collection from you. It’s common for mortgage lenders to request the automatic stay to be lifted so they can complete foreclosure proceedings. The lender’s request might be denied if you have nonexempt equity in your home that can be liquidated and used to pay some of your unsecured creditors.
