Filing a bankruptcy petition triggers a federal injunction called the automatic stay. It takes effect the second the court's clerk stamps the case, with no hearing and no judge's signature. Garnishments, bank levies, foreclosure sales, repossessions, lawsuits and collection calls all have to stop. A few things, like child support and criminal matters, keep going.
A case number is the whole trick
Your paycheck came in short on Friday. The sheriff's notice is taped to the front door, or the bank app shows a balance of zero with a note that says "legal hold." You've been putting off the call because you assumed a lawyer would need weeks, and you don't have weeks.
Here's the part most people don't know. The protection doesn't come at the end of a bankruptcy case. It comes at the very beginning, the moment the petition is filed electronically and the court assigns a case number. That number is a federal court order under 11 U.S.C. § 362. The employer's payroll department has to honor it. The bank has to honor it. The foreclosure trustee standing on the courthouse steps in Norwalk has to honor it.
We've filed emergency petitions from the office on Wilshire in the late afternoon and had the case number in hand before the client got back to the 405. The clerk's stamp is what matters, not the size of the paperwork behind it.
What stops, and what keeps going
The stay is broad but it isn't total. Congress carved out a handful of things that go on as if no case had been filed, mostly involving family support and the government's police powers. This table is the short version of section 362.
| Stops when you file | Does not stop |
|---|---|
| Wage garnishment (the employer must stop withholding) | Child support and spousal support collection |
| Bank levies and till taps | Criminal cases, including restitution |
| Foreclosure sales, even one scheduled for that morning | Paternity, custody and support proceedings in family court |
| Vehicle repossession | Certain IRS and FTB audits and assessments (the audit continues, the collection stops) |
| Collection lawsuits in Superior Court, at any stage | Eviction where the landlord already has a judgment for possession |
| Collection calls, letters and texts | License suspensions tied to support obligations |
| Utility shutoffs (the utility can ask for a deposit within 20 days) | A co-signer's liability in a Chapter 7 (Chapter 13 has a co-debtor stay) |
Two of those rows surprise people every week. Support keeps coming out of the paycheck. And a landlord who already has an unlawful detainer judgment can usually proceed, so a bankruptcy filed the night before the lockout does less than tenants hope.
How creditors find out
The court mails a notice to every creditor listed in the petition, but that takes days. When money is about to leave your account, days are too long.
So we don't wait for the mail. The afternoon the case is filed, we send the case number and a copy of the stamped petition directly to whoever is doing the taking: the sheriff's civil division handling a levy, the employer's payroll contact, the foreclosure trustee, the repo company's dispatcher. A garnishing creditor's attorney gets a fax or an email that same hour. Most of them stop immediately because continuing after notice exposes them to sanctions.
A creditor who keeps collecting after learning of the filing is violating a federal injunction. Section 362(k) lets the court award actual damages, attorney's fees, and in egregious cases punitive damages. Creditors know this. It's why a single phone call from a bankruptcy attorney's office tends to work faster than three months of the client begging.
If you filed and were dismissed before
The stay is weaker for repeat filers, and this is where people get hurt by cheap or do-it-yourself filings.
If you had a case dismissed within the year before the new filing, the stay lasts only 30 days unless we file a motion and persuade the judge to extend it. Two dismissed cases in the prior year means no stay at all when the new case is filed. We'd have to ask the court to impose one, and the burden is on you to show the new case is filed in good faith.
A skeleton Chapter 13 filed to stop a foreclosure, then dismissed for not filing the rest of the schedules, counts. So does a pro se Chapter 7 dismissed for a missing credit counseling certificate. Tell us about every prior case, even one you think didn't count. We check PACER anyway, and it's better to plan around it than to find out in front of the trustee.
How long the stay lasts
In a Chapter 7 the stay runs until the discharge is entered, roughly 60 days after the 341 meeting, at which point the discharge injunction takes over permanently for the debts that were wiped out. For property the trustee abandons or that you surrender, the stay ends when the case closes or when the court lifts it, whichever is first.
In a Chapter 13 it lasts for the length of the plan, three to five years, as long as you make the payments. That is the reason Chapter 13 is the tool for a house in foreclosure and a Chapter 7 usually isn't. A Chapter 7 pauses the sale for three or four months. A Chapter 13 stops it and gives you 60 months to catch up.
Secured creditors can ask the judge to lift the stay. A car lender will file a motion for relief if you stop paying after the case is filed, and a mortgage servicer will do the same in a Chapter 13 if plan payments or post-petition mortgage payments fall behind. Those motions get granted routinely when the payments aren't being made. The stay protects people who are using the case to fix something, not people who are using it to stall.
When the stay alone isn't a reason to file
Sometimes a caller wants to file only for the stay, and the honest answer is that it won't buy what they think.
Someone whose only income is Social Security and who owns nothing worth taking is already protected from most collection. A bankruptcy would stop the calls, but the calls can be stopped other ways, and the filing sits on the credit report for up to ten years. Someone with a support arrearage gets nothing from the stay for the debt that is actually hurting them. Someone with a foreclosure who cannot afford the regular mortgage payment going forward will get a few months from a Chapter 13, then a lifted stay and the same sale.
We say so on the first call. About one in seven of the people who reach us are told not to file. The rest usually need the stay badly, and for them it is worth every dollar of the fee. Our page on how we stop creditor harassment and collection lawsuits explains what the case does after the stay has done its job, and the published fee schedule shows what filing costs.
the deputy at the Stanley Mosk civil desk saw a bankruptcy case number faxed over before she'd finished processing a levy, and she stopped it right there. That's the stay working the way it should. The one I still think about was the opposite: a client who filed on his own with a petition preparer, got dismissed for missing a document, filed again himself, got dismissed again, and then called me. Third case in eleven months. No stay at all until we filed a motion and convinced the judge he meant it this time. It worked, but it took a hearing that never had to happen.
Questions people ask about this
Does the automatic stay stop wage garnishment immediately?
Yes, as of the filing time. The employer's obligation to withhold ends when they receive notice. We send the case number to payroll the same day so the next check comes through whole. A check already cut before filing may already be short, but the one after it shouldn't be.
Will the stay stop child support from being taken from my pay?
No. Support collection is one of the express exceptions in section 362(b), and the withholding order stays in place. A Chapter 13 can help you catch up on support arrears through the plan, but it does not pause the current obligation.
Can a creditor ignore the stay if they didn't get the court's mailed notice?
The stay is effective whether or not the creditor knows about it. Actions taken in violation are void. The creditor's lack of notice matters only to whether they owe damages, which is why we give notice directly and in writing the day of filing.
What happens if a creditor keeps calling after I file?
Give us the date, time and number. One letter usually ends it. If it continues, section 362(k) lets us seek actual damages and attorney's fees, and Central District judges have little patience for collectors who keep dialing a debtor in an open case.
Does the stay protect my spouse if only I file?
In a Chapter 7, no. Creditors can still pursue a non-filing spouse or co-signer personally. In a Chapter 13 the co-debtor stay protects a co-signer on consumer debts for as long as the plan is running.
Talk it through with the attorney
If money is about to be taken this week, call (310) 555-0184 or book a free video consultation today. Naomi will tell you within thirty minutes whether a filing will actually stop what's happening and how fast we can get a case number.