Have you ever felt overwhelmed by relentless creditor calls, lawsuits, or the threat of repossession? The financial burden of debt can be suffocating, but there is legal protection available. Every year, thousands of people seek relief through bankruptcy, and one of the most immediate and powerful protections it offers is the automatic stay.

At the Law Office of Joel Gonzalez, we understand the stress financial struggles bring. If you need a bankruptcy lawyer, we can help you file for bankruptcy relief in Texas and get the protection you need.

This article explains how the automatic stay in bankruptcy works, how it protects you, and what to expect when filing for bankruptcy.

What Is the Automatic Stay in Bankruptcy?

The automatic stay is a legal provision that immediately stops most collection actions once a person files for bankruptcy. This means that creditors must halt:

  • Collection calls and letters
  • Lawsuits related to unpaid debts
  • Repossession of vehicles
  • Foreclosure proceedings
  • Utility disconnections due to unpaid bills

This protection is automatic, meaning creditors cannot continue their collection efforts without court approval. The automatic stay provides individuals filing for bankruptcy the breathing room they need to reorganize their finances or liquidate assets without constant creditor pressure.

How Long Does the Automatic Stay Last?

The duration of the automatic stay depends on the type of bankruptcy filed and a person’s filing history:

  • Chapter 7 Bankruptcy: The automatic stay generally lasts until the case is closed or the debt is discharged, usually around three to four months.
  • Chapter 13 Bankruptcy: The stay can last for the entire repayment period, typically three to five years, as long as payments are made according to the court-approved plan.
  • Multiple Filings: If an individual has filed for bankruptcy more than once in a short time, the automatic stay may be limited or require court approval to extend.

To learn more about Chapter 7 and 13 bankruptcies, read our blog, “Understanding the Differences Between Chapter 7 and Chapter 13 Bankruptcy.” Please link to LSA2.

Exceptions to the Automatic Stay

While the automatic stay in bankruptcy offers broad protections, there are exceptions, including:

  • Criminal proceedings, such as fines or penalties, are not stopped.
  • Some eviction proceedings can continue if the landlord obtained a judgment before the bankruptcy was filed.
  • Tax audits and certain tax-related actions may proceed, although collection efforts are usually paused.
  • Understanding these exceptions helps individuals set realistic expectations when they file for bankruptcy relief in Texas.

Recent Legal Interpretations and Their Impact

Courts continue to refine how the automatic stay applies in different situations. Recent rulings have clarified creditor responsibilities, reinforcing that creditors who violate the automatic stay may face penalties, including fines and damages. In some cases, courts have held creditors accountable for continuing collection efforts, highlighting the importance of this protection for those seeking relief.

What to Do If a Creditor Violates the Automatic Stay

A debt relief lawyer holding a document
The automatic stay is a legal provision that immediately stops most collection actions once a person files for bankruptcy

If a creditor continues collection efforts after you have filed for bankruptcy, take these steps:

  • Notify Your Bankruptcy Attorney– A bankruptcy attorney can contact the creditor and demand compliance.
  • Keep Records– Document any collection attempts, including letters or phone calls.
  • File a Motion with the Court– If a creditor ignores the automatic stay, legal action may be necessary.

The penalties for creditors who violate the automatic stay can be severe, which is why it is essential to seek legal help if you experience this issue.

Get the Protection You Need Today

What if you could stop creditor harassment today? With the automatic stay in bankruptcy, you can. The Law Office of Joel Gonzalez is here to help.

As a trusted bankruptcy lawyer in Corpus Christi, TX, we provide personalized guidance to ensure you receive the protection and debt relief you need. Contact us at (361) 654-DEBT to schedule a consultation and take the first step toward financial freedom.