How long is an automatic stay in bankruptcy?

Filing for bankruptcy protects a debtor by providing him with an automatic stay. An automatic stay means the debtor or debtors filing for bankruptcy are legally protected from creditors attempting to collect on what is owed to them. This automatic stay remains in effect, protecting the debtor, until the bankruptcy case is officially discharged, meaning it has finished going through court and is considered official. Should the case not make it to the level of discharge, i.e. if it is dismissed or thrown out for any reason, the automatic stay will be lifted at that time.

While the automatic stay will normally remain in effect for the duration of the bankruptcy, one exception to this rule occurs if you filed for bankruptcy at any time during the year prior to the current filing, and had that case dismissed before completion. If this is the case, your automatic stay on the current filing will only last 30 days. This is designed to prevent people from taking advantage of the system (i.e. – to stop people who don’t really intend to file for bankruptcy but who are simply using the automatic stay for protection).

In some cases, particularly those where the case may be taking longer than usual to complete or where a debt has particular urgency for some reason, a creditor can request that the judge lift the automatic stay for them, meaning that this one creditor would be legally allowed to pursue the debts they are owed. This can only be done with good reason and by a judge’s order.

The bankruptcy process is designed to protect you if your debts become more than you can cope with, however there are some legal complexities to the rules. To ensure your bankruptcy goes smoothly and that you get the best result possible, it is a good idea to consult with a lawyer for advice.