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Understanding the automatic stay

Despite yours and/or your organization’s best attempts to meet your debts, certain events and circumstances may keep you from doing so. Should your financial struggles continue long enough, your creditors may choose to initiate legal action against you. This may bring with it added expenses and fees that could further compound your debt problems. Many of those in Rockingham County who are in your same position come to us here at The Law Office of Paul Petrillo wondering what they may do to cease such action. One solution may be the automatic stay granted by a Chapter 11 bankruptcy.

According to the U.S. Bankruptcy Code as shared by the Legal Information Institute, an automatic stay prohibits a creditor from commencing or continuing any litigious action after you have filed for bankruptcy. This is meant to provide you the chance to continue to move forward with resolving your debts without having to worry about other debt-related legal proceedings. Specifically, the automatic stay prohibits:

  •          Any litigation proceedings that could have commenced prior to your filing date.  
  •          The enforcement of any prepetition judgements.
  •          Any attempts to repossess certain properties of the bankruptcy estate.
  •          Any liens against prepetition debt claims.
  •          Any other collection actions against debts accrued prior to your petition date.
  •          Any tax court litigation you may be involved in.

Your automatic stay also does not allow for any setoffs of prepetition debts with first being granted approval by the court.

You should, however, remember that there are certain exceptions to the automatic stay. Those include actions related to enforce federal regulations, lawsuits commenced after your filing date, or expenses linked to criminal proceedings.

You can find out more about the protections offered by a Chapter 11 bankruptcy by continuing to browse through our site.


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Law Office of Paul Petrillo
One Tara Boulevard
Suite 200
Nashua, NH 03062

Phone: 603-635-4149
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