Definition of Automatic stay:
Prohibitory injunction issued automatically upon filing of a petition, such as one issued against creditors when a bankruptcy petition is filed.
Under Section 362 of the United States Bankruptcy Code, an automatic stay goes into effect the moment a debtor files for bankruptcy. The automatic stay applies to both individuals and businesses, and to all of the chapters of the Bankruptcy Code.
An automatic stay is a provision in United States bankruptcy law that temporarily prevents creditors, collections agencies, government entities, and individuals from pursuing debtors for amounts owed.
How to use Automatic stay in a sentence?
- Once an automatic stay goes into effect, creditors are unlikely to receive the full amounts they are owed.
- Automatic stay provisions protects debtors from creditors by freezing their claims on property, collateral, and assets until bankruptcy court proceedings are completed.
- The length of an automatic stay depends on various factors, including duration of the bankruptcy court case and type of filing.
Meaning of Automatic stay & Automatic stay Definition