The automatic stay

What filing stops, and how to tell a creditor.

When you file bankruptcy, the law puts most collection on hold. This hold is called the automatic stay. This guide explains what it stops, what it does not stop, and how to tell a creditor or debt collector that you filed. A free notice letter is below.

What the automatic stay does

When you file, an 'automatic stay' starts right away. Most creditors must stop collection: lawsuits, wage garnishment, foreclosure, repossession and collection calls. Some actions are not stopped, such as collecting child support or alimony and many criminal cases. If you had a case dismissed in the past year, the stay may last only 30 days unless the court extends it; with two or more dismissed cases in the past year, there may be no stay at all.

Law: 11 U.S.C. 362(a), 362(b), 362(c)(3), 362(c)(4)

Telling creditors you filed

The court sends notice of your case to the creditors you list. You can also tell a creditor or debt collector yourself. The free letter below gives your case number, court, filing date and chapter, states the automatic stay in 11 U.S.C. 362(a) and asks them to stop collection contact. If you have a bankruptcy attorney, it asks them to contact your attorney instead.

The stay is not the end of the debt

The stay is a pause while your case is open. Which debts end depends on the discharge.

A discharge ends your personal liability but does not remove a valid lien. A secured creditor may still take the property (such as a car or house) if you do not pay.

Read debts bankruptcy does not erase.

Chapter 7 and Chapter 13

Chapter 7 is 'liquidation'. A trustee may sell property that is not exempt and pay creditors. Most individual Chapter 7 cases have no property to sell. Most remaining debts are discharged, usually about 60 to 90 days after the first date set for the meeting of creditors.

Law: 11 U.S.C. 701-727; Fed. R. Bankr. P. 4004(c)

Chapter 13 is a repayment plan. You keep your property and pay part or all of your debts through a court-approved plan over 3 or 5 years. You need regular income. It can let you catch up on missed mortgage payments.

Law: 11 U.S.C. 1321-1328

If you filed before

Earlier cases matter in two ways: a dismissed case in the past year can shorten the stay, as explained above, and a past discharge can limit a new one:

  • Chapter 7 after Chapter 7: 8 years between the filing dates of the two cases (if you got a discharge in the first).
  • Chapter 7 after Chapter 13: 6 years between filing dates, unless your Chapter 13 plan paid 100% of unsecured claims, or at least 70% in a good-faith best-effort plan.
  • Chapter 13 after Chapter 7: no Chapter 13 discharge if you got a Chapter 7 (or 11 or 12) discharge in a case filed within 4 years before the new case.
  • Chapter 13 after Chapter 13: no new discharge if you got a Chapter 13 discharge in a case filed within 2 years before the new case.

Law: 11 U.S.C. 727(a)(8); 11 U.S.C. 727(a)(9); 11 U.S.C. 1328(f)(1); 11 U.S.C. 1328(f)(2)

What happens next

About a month after you file, you must attend the 'meeting of creditors' (341 meeting). The trustee asks you questions under oath about your property and debts. Creditors may come and ask questions. No judge attends. Chapter 7: 21 to 40 days after filing. Chapter 13: 21 to 50 days after filing. Bring photo ID and proof of your Social Security number. If you file jointly, both spouses must attend.

Law: 11 U.S.C. 341, 343; Fed. R. Bankr. P. 2003(a), 4002(b)(1)

After you file, you must take a second, separate course on personal financial management (debtor education) from an approved provider. In most cases you get no discharge without it. Chapter 7: file the certificate within 60 days after the first date set for the meeting of creditors. Chapter 13: by the date of your last plan payment. Some providers send the certificate to the court for you.

Law: 11 U.S.C. 727(a)(11), 1328(g); Fed. R. Bankr. P. 1007(b)(7), 1007(c)(4)

Before you file

Before you file, you must take a credit counseling course (a 'briefing') from an agency approved by the U.S. Trustee Program. You must take it within 180 days before you file. It can be in person, by phone or online, alone or in a group. Keep the certificate: you file it with your case. If you skip it, your case can be dismissed.

Law: 11 U.S.C. 109(h), 111

This is general information, not legal advice. A legal aid office can help for free; each state page lists free help.

Free letter: tell a creditor you filed bankruptcy

Tell a creditor or debt collector in writing that you filed a bankruptcy case. Fill it in from your court papers, then download it. Keep a copy.

Required when you mail it.

Don't enter a full account number; the last 4 digits are enough.

As written on your court papers. Choose your state to see its courts.

It goes into the letter as you type it. You can add a ready-made sentence:

Other formats

Sign the letter and keep a copy. If you mail it, certified mail with a return receipt lets you prove when it arrived. By email, keep a copy of what you sent.