automatic stay

Also found in: Wikipedia.

Automatic stay

The restricting of liability holders from collection efforts related to collateral seizure. Automatically imposed when a firm files for bankruptcy under Chapter 11.

Automatic Stay

In bankruptcy, an injunction against any ongoing collection process by any creditor. That is, all creditors must stop current attempts to collect debts during the bankruptcy proceedings. Chapter 13 bankruptcy also protects co-debtors who may not have filed bankruptcy. The automatic stay prevents creditors from filing lawsuits, making collection calls, or repossessing or foreclosing on property until the debts are discharged (or not) or the bankruptcy judge lifts the stay. American bankruptcy law limits the automatic stay for second-time filers to 30 days, and does not grant automatic stays for third and subsequent filings.

automatic stay

A bankruptcy provision that stops all creditor actions,including foreclosures,immediately upon a debtor's filing for bankruptcy protection. There is then a breathing period during which no creditor action may take place.Afterward,a creditor may ask the court for permission to proceed,called a request to lift the automatic stay.To be successful,it must prove that neither the debtor, nor any other creditors,will be prejudiced if foreclosure or repossession is allowed to continue.

References in periodicals archive ?
Once signed into law it will also lift all existing court orders against projects, as well as revoke the provision that grants an automatic stay order once an appeal has been lodged at the NET.
Caution must be taken in exercising one's setoff rights so that there is no violation of the automatic stay provisions of the Bankruptcy Code.
However, the BAP reversed the lower court's holding that the creditor, the Finance Authority of Maine, did not willfully violate the automatic stay when it took 14 months to refund a garnishment of the debtor's Social Security income that occurred just before FAME received notice of the filing.
With the tentative approval, the product has met all required regulatory standards for follow-on biologics of clinical and nonclinical safety, efficacy and quality, but is subject to an automatic stay due to a lawsuit from Sanofi claiming patent infringement.
The motion and form of complaint seek an order lifting the automatic stay to allow AGM and AGC to exercise their statutory right to seek the appointment of a receiver for the Puerto Rico Electric Power Authority (PREPA) by filing the proposed complaint with a court of competent jurisdiction.
The authors cover business entities and business debt, filing for bankruptcy, the bankruptcy estate, the automatic stay, creditors and claims, avoiding prepetition transfers, executory contracts and unexpired leases, and many other related subjects over the course of the bookAEs fifteen chapters and four appendices.
The bankruptcy code's automatic stay provision (12) delays collection activities long enough to allow homeowners to get their financial affairs in order.
With the diocese's Chapter 11 filing, an automatic stay was triggered that had halted all pending litigation against the diocese.
Generally, upon the filing of a bankruptcy petition by a debtor, an automatic stay arises on property of the estate.
Accordingly, if the trade creditor suspends performance or attempts to modify the terms of the supply agreement so as to require cash-on-delivery in response to the debtor's bankruptcy, the debtor may threaten to sue the trade creditor for breach of contract or for violation of the automatic stay.
The most common errors are not complying with the automatic stay and not meeting deadlines.
The automatic stay prohibits creditors from, among other things: commencing or continuing a legal action to collect a debt; attempting to create, perfect, or enforce a lien against the company's property; enforcing a judgment against the entity; offsetting dueling debts; or performing any other act to obtain possession of, or to exercise control over, the debtor's property.

Full browser ?