Automatic Stay

In Bankruptcy law, an automatic stay is a court-mandated injunction that halts any repossession or foreclosure action by secured creditors trying to re-claim the property securing the loan. As soon as a bankruptcy petition is filed (in most cases), the automatic stay is in place and the debtor is protected from collections, repossession or foreclosure action by the creditor, as long as the terms of the Bankruptcy plan are abided by. The creditor may petition the court to have this protection removed but must show just-cause to do so. If a debtor had a case dismissed within the year immediately preceding the current filing, there are additional legal actions that must take place to keep the stay in place.