What is an automatic stay and is there a way around it?
An automatic stay arises when a debtor files bankruptcy, whether it be a Chapter 7, a Chapter 13, or a Chapter 11. What an automatic stay does is it prevents the creditor from taking any further actions to collect the debt outside of bankruptcy court, and there are severe sanctions for violating an automatic stay.
There is a way around it. Sometimes under the law it doesn’t even take effect if there has been a recent bankruptcy filing by the same debtor. In that instance, it’s best to obtain a comfort order from the court establishing that the automatic stay is not in effect.
The other way to get around an automatic stay, so to speak, is to file a motion to obtain relief from stay in bankruptcy court, which can be granted under the right circumstances.
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