Automatic stay

Automatic stay,

Definition of Automatic stay:

  1. Prohibitory injunction issued automatically upon filing of a petition, such as one issued against creditors when a bankruptcy petition is filed.

  2. 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.

  3. 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?

  1. Once an automatic stay goes into effect, creditors are unlikely to receive the full amounts they are owed.
  2. Automatic stay provisions protects debtors from creditors by freezing their claims on property, collateral, and assets until bankruptcy court proceedings are completed.
  3. 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