By Robert A. Stiberman, Esq., Member of The Florida Bar since 1998, representing Florida bankruptcy clients since 2009. Last reviewed: June 2026.
The single most immediate benefit of filing bankruptcy is the automatic stay. The moment your Chapter 7 case is filed, 11 U.S.C. § 362 brings most collection to a hard stop, the calls, the lawsuits, the wage garnishment, the foreclosure sale. It’s not something you apply for; it happens by operation of law on filing. Here’s what it stops, what it doesn’t, and the fine print that trips people up.
What the Automatic Stay Stops
Under § 362(a), creditors must immediately halt almost all collection activity, including:
- Lawsuits and judgments. Pending collection suits freeze; your attorney files a notice of bankruptcy and the case can’t proceed.
- Wage garnishment. An active garnishment must stop, so your next paycheck should be whole again.
- Foreclosure. A scheduled foreclosure sale is halted (though a mortgage lender can ask the court to lift the stay, more below).
- Vehicle repossession. A pending repossession stops; see what happens to the debt when a car is repossessed.
- Utility shutoffs. A utility can’t disconnect you for at least 20 days (§ 366).
- Collection calls and letters. All creditor contact on covered debts must cease.
- Evictions, paused, unless the landlord already obtained a judgment of possession before you filed (§ 362(b)(22)).
What the Automatic Stay Does Not Stop
Section 362(b) lists exceptions. The ones that matter most to consumers:
- Domestic support. Collection of child support and alimony continues, including ongoing wage withholding for support (§ 362(b)(2)).
- Tax audits. The IRS or state can still audit you and issue a notice of deficiency (§ 362(b)(9)), it just can’t levy to collect during the stay.
- Criminal proceedings (§ 362(b)(1)).
A note specific to Chapter 7: there is no co-debtor stay. If someone co-signed your loan, creditors can still pursue them. The co-debtor stay exists only in Chapter 13 (§ 1301).
Secured Debts, the Stay Buys Time, Not a Free Pass
For secured creditors (mortgage, car lender), the stay pauses action, but the creditor can file a motion for relief from stay under § 362(d), typically when there’s no equity and you’re behind on payments. In a Chapter 7, if you want to keep a house or car, you generally need to stay current and often reaffirm or redeem; otherwise the stay simply delays repossession or foreclosure until the case ends. (If keeping the home or car is the goal and you’re behind, Chapter 13 is usually the better tool, it lets you cure the arrears over time.)
The Repeat-Filer Limits, Important Fine Print
If you’ve had a prior bankruptcy dismissed recently, the stay may be limited or absent, this catches people off guard:
- One prior case dismissed within the past year: the automatic stay terminates after 30 days unless you move to extend it and show the new case was filed in good faith (§ 362(c)(3)).
- Two or more prior cases dismissed within the past year: no stay goes into effect at all unless you ask the court to impose one (§ 362(c)(4)).
If either applies to you, tell your attorney up front, the motion to extend or impose the stay has a tight deadline.
What If a Creditor Violates the Stay?
The stay has teeth. Under § 362(k), an individual injured by a willful violation of the automatic stay can recover actual damages, costs, and attorney’s fees, and, in appropriate cases, punitive damages. So a collector who keeps garnishing or calling after being notified of your filing isn’t just out of line; they can be made to pay. Keep records of any post-filing contact and tell your lawyer.
How Long the Stay Lasts
In a typical Chapter 7, the stay stays in place until the debt is discharged or the case closes (a few months), or until a court lifts it as to a particular creditor. When your discharge enters, it’s replaced by the permanent discharge injunction (§ 524), which bars creditors from ever collecting discharged debts.
From our practice: If you’ve had a prior bankruptcy dismissed within the past year, tell us on day one. The motion to extend or impose the automatic stay has a tight deadline, and missing it can leave you unprotected exactly when you need the stay most.
Frequently Asked Questions
How fast does the automatic stay take effect? Immediately upon filing, there’s no waiting period. Your attorney then notifies creditors so collection stops.
Will it stop my wage garnishment? Yes, for most debts the garnishment must stop on filing, except ongoing child support or alimony withholding.
Can a creditor get around the stay? Only by asking the court for relief from stay (§ 362(d)), usually a secured lender on property you’re behind on. They can’t simply ignore it.
I filed before and it was dismissed, do I still get the stay? Maybe with limits. One dismissal in the past year limits the stay to 30 days unless extended; two or more means no stay unless the court imposes one. Raise this early.
What if a collector keeps calling after I file? That can be a willful stay violation, and § 362(k) lets you recover damages and attorney’s fees. Document it.
Talk to a Florida Chapter 7 Attorney
If garnishment, a lawsuit, or a foreclosure is bearing down, filing can stop it the same day. Call 954-922-2283 or request a free, confidential consultation.
This article is general information, not legal advice. How the automatic stay applies depends on the specific facts of your case.