The Automatic Stay in Tennessee Bankruptcy
Filing a bankruptcy petition in any Tennessee federal district court immediately triggers the automatic stay under 11 U.S.C. § 362. The stay is a federal injunction that stops virtually all collection activity — phone calls, lawsuits, garnishments, foreclosures — for the duration of the case.
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.
Disclaimer: This page is general legal information, not legal advice. Bankruptcy law is complex and fact-specific. Consult a licensed Tennessee bankruptcy attorney before making any decisions about filing.
What the Automatic Stay Does
The moment you file a bankruptcy petition in Tennessee — in the Eastern, Middle, or Western District — the automatic stay springs into existence by operation of law under 11 U.S.C. § 362. No judge needs to sign an order; no notice to creditors is required first. The stay is an immediate, nationwide federal injunction against collection activity.
What the Stay Covers
The automatic stay is broad. It stops:
- Creditor calls and letters — collection phone calls, demand letters, and written communications from debt collectors must cease upon notice of the filing.
- Civil lawsuits — ongoing collection lawsuits are paused, and new suits cannot be filed for the duration of the case.
- Wage garnishments — any garnishment of your paycheck stops immediately. Your employer must halt withholding once it receives notice of the bankruptcy.
- Bank account levies — creditors cannot seize funds from your bank account after the stay takes effect.
- Foreclosures — a mortgage lender cannot proceed with a foreclosure sale while the stay is in place. This makes bankruptcy, particularly Chapter 13, a powerful tool for homeowners who need time to cure arrears.
- Vehicle repossessions — a lender cannot repossess a car after the petition is filed, though it may seek relief from the stay if the debtor fails to make adequate protection payments.
- Utility shutoffs — a utility company cannot disconnect service for the first 20 days after filing.
What the Stay Does Not Cover
Several types of proceedings are expressly excluded from the automatic stay under 11 U.S.C. § 362(b):
- Criminal proceedings — a bankruptcy filing does not stop a criminal case, even one related to financial conduct.
- Child support and alimony proceedings — domestic support proceedings continue, and the stay does not prevent enforcement of domestic support obligations.
- IRS audits and tax assessments — the IRS can continue auditing your returns and assessing taxes, though it cannot pursue collection of pre-petition tax debts.
- Certain pension loan repayments — withholding for a qualified retirement plan loan generally continues.
How Creditors Get Relief from the Stay
A creditor who believes it is entitled to proceed can file a motion for relief from stay in the bankruptcy court under 11 U.S.C. § 362(d). Common grounds include: the debtor has no equity in the collateral and the property is not necessary for reorganization (relevant in Chapter 7); or the debtor is not making adequate protection payments on a car or mortgage while the case is pending. The court holds a hearing and rules on the motion. If granted, the creditor may resume its collection or foreclosure action.
Serial Filer Limitations
To prevent abuse, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 imposed limits on repeat filers. If you had one prior case dismissed within the year before your new filing, the automatic stay terminates 30 days after the new filing unless the court extends it upon a showing of good faith. If you had two or more prior cases dismissed within the prior year, no automatic stay goes into effect at all without a court order.
Chapter 13 Co-Debtor Stay
In Chapter 13, a separate provision — the co-debtor stay under 11 U.S.C. § 1301 — extends automatic stay protection to co-signers on consumer debts. If a family member co-signed your credit card or personal loan, they are shielded from collection while your Chapter 13 case is active and the plan proposes to pay the debt in full. Chapter 7 provides no equivalent protection for co-debtors.
When the Stay Ends
The automatic stay terminates when the bankruptcy case closes, is dismissed, or is converted to another chapter. For individual debtors who receive a discharge, the stay is replaced by the permanent discharge injunction, which prohibits collection of discharged debts for the rest of the debtor’s life.
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Start your free intakeFrequently asked questions
- Does the automatic stay stop wage garnishment in Tennessee?
- Yes. The automatic stay under 11 U.S.C. § 362(a)(6) stops wage garnishments immediately upon filing. Your employer must stop withholding once they receive notice of the bankruptcy.
- Can a creditor get relief from the automatic stay?
- Yes. A creditor may file a motion for relief from stay under 11 U.S.C. § 362(d) if, for example, the debtor has no equity in secured property or is not making adequate protection payments on a car loan or mortgage.
- Does the automatic stay protect co-signers?
- In Chapter 13, the co-debtor stay (11 U.S.C. § 1301) extends protection to co-signers on consumer debts. Chapter 7 generally does not protect co-debtors.
Sources
Related guides
- Chapter 13 Bankruptcy in Tennessee Chapter 13 bankruptcy lets Tennessee debtors keep all their assets by committing to a court-approved repayment plan lasting 3 years (below-median income) or 5 years (above-median income). It is the main tool for stopping a foreclosure and catching up on mortgage arrears.
- Chapter 7 Bankruptcy in Tennessee Chapter 7 bankruptcy eliminates most unsecured debts through a court-supervised liquidation process. Tennessee filers must pass a means test, use Tennessee's state exemptions to protect property, and typically receive a discharge within 4–6 months of filing.
- Debts That Cannot Be Discharged in Tennessee Bankruptcy Not every debt is wiped out in bankruptcy. Under 11 U.S.C. § 523, certain debts survive a Chapter 7 or Chapter 13 discharge: domestic support obligations, most student loans, recent income taxes, debts incurred by fraud, and debts for DUI injuries, among others.
- How Bankruptcy Works in Tennessee Bankruptcy in Tennessee is a federal court process governed by Title 11 of the U.S. Code, but the exemptions that protect your property come from Tennessee state law. Most individuals file Chapter 7 (4–6 months) or Chapter 13 (3–5 year repayment plan).
- Tennessee Bankruptcy Exemptions Tennessee opted out of the federal bankruptcy exemption scheme, so debtors use Tennessee's own exemptions (T.C.A. Title 26, Chapter 2). Key protections: homestead up to $35,000 ($52,500 jointly), a $10,000 wildcard for any personal property, and essentially unlimited retirement account protection.