QUESTION: I have just filed for Bankruptcy. Can you let me know what exactly is the Automatic Stay?

Answer:Typically a debtor has already been sued or threatened with legal action by creditors by the time a voluntary petition is filed. The debtor may have been subjected to wage garnishments or other judicial processes employed in the collection efforts of creditors. In order to relieve the financial pressures that caused the debtor to seek bankruptcy relief, the Bankruptcy Code provides that the filing of the petition results in an automatic stay of certain actions. This stay, which arises by operation of law and requires no judicial action, halts the collection of claims and protects the debtor from further harassment by creditors. It is one of the most fundamental and significant debtor protections under bankruptcy law. The automatic stay prevents a creditor from pursuing remedies against the debtor’s assets to the detriment of other creditors and allows the debtor some breathing room. If the speediest creditors were permitted to continue to grab the debtor’s property after the bankruptcy case had commenced, an orderly liquidation and an equitable distribution of the estate to creditors would be frustrated.