The Automatic Stay in Bankruptcy
The automatic stay under 11 U.S.C. § 362 takes effect the instant a bankruptcy petition is filed, immediately halting most collection actions including foreclosure, wage garnishment, collection calls, and pending lawsuits. It is one of the most powerful protections in bankruptcy law.
By Find Local Law Editorial Team · Last reviewed: May 26, 2026
Researched and drafted with AI assistance and verified against primary sources (statutes, Judicial Council forms, and official court websites). This is general information, not legal advice.
This is general information, not legal advice. A Georgia bankruptcy attorney can help.
What the Automatic Stay Is
The automatic stay is one of the most immediate and powerful protections in all of bankruptcy law. Under 11 U.S.C. § 362, the stay springs into effect the instant your bankruptcy petition is filed — no court hearing required, no advance notice to creditors needed. From that moment, most collection activity against you, your property, and your bankruptcy estate is legally prohibited.
For many filers, the automatic stay is the single most urgent reason to file. If a wage garnishment is draining your paycheck, a foreclosure sale is days away, or collection calls are relentless, filing bankruptcy stops all of it in its tracks.
What the Automatic Stay Stops
The stay under 11 U.S.C. § 362(a) halts a broad range of actions, including:
Foreclosure. A pending or scheduled foreclosure on your home cannot proceed after you file. The sale is stopped, and the lender must seek court permission to continue.
Wage garnishment. A creditor cannot continue taking a portion of your paycheck once the stay is in effect. Your employer must halt the deduction immediately upon receiving notice.
Lawsuits and judgments. Civil lawsuits against you for money are stayed. Creditors cannot file new suits or take steps to enforce existing judgments (like attaching bank accounts).
Collection calls and letters. Debt collectors and creditors cannot contact you to demand payment. The Fair Debt Collection Practices Act’s restrictions still apply, and the automatic stay adds a separate layer of prohibition.
Repossession. A creditor cannot repossess a car, equipment, or other collateral after the petition is filed. If repossession occurred shortly before filing, you may be able to recover the property.
Utility shutoff. Under 11 U.S.C. § 366, a utility company cannot terminate service for the first 20 days after filing, giving you time to provide adequate assurance of future payment.
IRS and state tax collection. Most tax collection actions — including levies, tax liens, and IRS notices of deficiency — are stayed, though some tax proceedings are excepted.
Exceptions: What the Stay Does NOT Stop
The automatic stay is broad but not absolute. 11 U.S.C. § 362(b) carves out important exceptions:
Domestic support proceedings — actions to establish, collect, or modify child support or alimony are not stayed. The court cannot be used to delay a custody or support hearing.
Criminal proceedings — the stay does not affect criminal prosecutions or sentencing, even if the underlying conduct relates to a debt.
Certain tax audits and assessments — the IRS can continue auditing tax returns and issuing deficiency notices, though enforced collection is stayed.
Pension loan repayments — your employer can continue deducting loan repayments from a 401(k) or similar plan.
How Long the Stay Lasts
In most cases, the automatic stay remains in effect for the entire duration of the bankruptcy case. In Chapter 7, that is approximately four months. In Chapter 13, the stay runs through the three-to-five year life of the repayment plan.
The stay ends automatically when: the case is closed, the case is dismissed, or a discharge is entered. In Chapter 13, the discharge injunction replaces the automatic stay when the case completes.
Serial Filers: Reduced Stay Protection
If you filed a prior bankruptcy case that was dismissed within the past year, the automatic stay in your new case lasts only 30 days automatically, under 11 U.S.C. § 362(c)(3). If you had two or more dismissals within the prior year, there may be no automatic stay at all unless you ask the court to impose one. Courts use these rules to deter bad-faith repeat filings.
Motion for Relief from Stay
A creditor who wants to proceed with a foreclosure, repossession, or other action can file a motion for relief from stay asking the court’s permission. Common grounds include lack of equity in the property, failure to maintain insurance or taxes, or inability to fund a Chapter 13 plan. The court holds a hearing and decides whether to lift, modify, or continue the stay.
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Start your free intakeFrequently asked questions
- Does the automatic stay stop a foreclosure sale in Georgia?
- Yes. Filing bankruptcy triggers the automatic stay under 11 U.S.C. § 362, which immediately halts a foreclosure sale — even if it is scheduled for that same day. However, a secured creditor (your mortgage lender) can file a motion for relief from stay and ask the court to lift the stay so the foreclosure can proceed. If you have no equity in the property or cannot fund a Chapter 13 plan to cure arrears, the court may grant that relief.
- Does the automatic stay stop wage garnishment in Georgia?
- Yes. A wage garnishment is a 'act to collect, assess, or recover a claim' and is expressly stayed by 11 U.S.C. § 362(a)(6). Your employer must stop the garnishment once they receive notice of your bankruptcy filing. Any wages garnished after the bankruptcy petition date may be recoverable as a violation of the stay.
- What happens if a creditor violates the automatic stay?
- A creditor who willfully violates the automatic stay is liable for actual damages, including attorneys' fees and costs, and may be liable for punitive damages in egregious cases under 11 U.S.C. § 362(k). If a creditor contacts you, repossesses property, or takes any collection action after being notified of your filing, report it to your bankruptcy attorney immediately.
Sources
Related guides
- Chapter 13 Bankruptcy in Georgia Chapter 13 bankruptcy lets Georgia filers keep all their property while repaying debts through a 3- to 5-year court-approved plan. It is the primary tool for stopping foreclosure and catching up on mortgage arrears, and it can discharge some debts that Chapter 7 cannot.
- Chapter 7 Bankruptcy in Georgia Chapter 7 is the fastest form of personal bankruptcy — most Georgia filers receive a discharge of eligible debts within about four months of filing. You must pass the means test to qualify, and Georgia's opt-out exemptions under O.C.G.A. § 44-13-100 determine what property you keep.
- Georgia Bankruptcy Exemptions Georgia is an opt-out state, meaning filers must use Georgia's state exemption schedule under O.C.G.A. § 44-13-100 instead of the federal exemption list. Exemptions protect specific property from the bankruptcy trustee in a Chapter 7 case and determine how much unsecured creditors receive in a Chapter 13 plan.
- How Bankruptcy Works in Georgia Bankruptcy in Georgia is a federal court process governed by Title 11 of the U.S. Code. Individual filers choose between Chapter 7 liquidation and Chapter 13 reorganization based on their income, assets, and goals. All cases are filed in one of Georgia's three federal bankruptcy districts, and 341 meetings are now held via Zoom.
- Non-Dischargeable Debts in Bankruptcy Bankruptcy discharge eliminates most debts, but 11 U.S.C. § 523 lists specific categories that survive — including student loans, recent income taxes, domestic support obligations, and debts from fraud. Chapter 13 can discharge a few categories that Chapter 7 cannot.