Glossary

The Automatic Stay

Written by JaredLast reviewed 2026-08-25

What is the automatic stay?

The automatic stay is an injunction against most collection activity that arises by operation of law the instant a bankruptcy petition is filed — no separate order, motion, or judge's signature is needed. 11 U.S.C. § 362(a) says a petition filed under § 301, 302, or 303 "operates as a stay, applicable to all entities," reaching not just named creditors but anyone who might otherwise act against the debtor or the property of the bankruptcy estate. It's the mechanism behind the practical experience of filing: collection calls generally stop, a scheduled repossession generally can't proceed, and a pending lawsuit generally freezes, all without the debtor doing anything beyond filing the case itself.

The stay isn't permanent and isn't unconditional. It has a defined scope — eight categories of acts, covered next — a long list of exceptions under § 362(b), and rules under § 362(c) that can shorten or eliminate it entirely for someone who has filed and had a case dismissed recently. And it isn't a restriction on the debtor doing anything; it constrains what other parties can do to the debtor, not what the debtor can do.

What eight things does § 362(a) actually stop?

Eight categories of acts, most of them keyed to when the underlying claim arose:

Paragraphs (a)(1), (a)(2), (a)(5), (a)(6), and (a)(7) are each written in terms of a claim, judgment, lien, or debt that "arose before the commencement of the case." That timing language is doing real work: the stay protects a debtor from actions on debts that already existed when the case was filed. It says nothing about anything that happens afterward. The other three are keyed differently — (a)(3) and (a)(4) turn on whether something is property of the estate rather than on when a claim arose, and (a)(8) is measured from "the date of the order for relief" for an individual debtor and from "a taxable period the bankruptcy court may determine" for a corporate one.

One caveat on the count: the codified text of § 362(a) now shows a ninth paragraph. § 362(a)(9), covering "the redemption of payment stablecoins issued by the permitted payment stablecoin issuer," was added by the GENIUS Act, Pub. L. 119-27, § 11(c)(1) (July 18, 2025). It is not yet operative — under § 20 of that Act it takes effect on the earlier of 18 months after enactment or 120 days after the federal payment stablecoin regulators issue final implementing rules — and it has no application to a consumer bankruptcy or a car loan. A reader comparing this page against the statute on Cornell will see nine paragraphs listed; eight are the ones that currently do anything.

Does the automatic stay stop you from applying for a new car loan?

No. Read back through the eight paragraphs above — every one describes something a creditor, court, or other party does to the debtor or to estate property. None of them describes anything the debtor does. Applying for a car loan, signing new financing paperwork, or taking on any other new credit is the debtor's own voluntary act. It isn't a proceeding "against the debtor," a lien "against property of the estate," or a collection of a "claim against the debtor" — so nothing in § 362(a) reaches it.

That's a narrower point than it might sound. It means the stay creates no legal barrier to seeking new credit while a case is open. It says nothing about whether a lender will actually approve the application, and nothing about a Chapter 13 filer's separate obligation to get the trustee's authorization before taking on new debt — that requirement runs through §§ 1305(c), 1322(a)(1), and 1327, not the stay, and is covered on the motion-to-incur-debt glossary page. Chapter 7 carries no equivalent trustee-approval step at all; see do you need permission to buy a car during Chapter 7.

What does § 362(b) exclude from the stay?

§ 362(b) lists 29 numbered exceptions where the petition "does not operate as a stay" at all — no motion is needed for the excluded action to proceed, because the stay was never there to begin with. (One of the 29, paragraph (5), was repealed in 1998, leaving 28 currently in force.) A few of the more commonly relevant ones:

• Criminal proceedings, under § 362(b)(1), are excluded outright — a bankruptcy filing does not pause a criminal case.
• Domestic support and family-law matters, under § 362(b)(2), cover paternity, custody, visitation, divorce (except dividing estate property), domestic-violence proceedings, and several enforcement mechanisms for support obligations — income withholding, license suspension, credit-bureau reporting, and tax-refund interception.
• Tax administration, under § 362(b)(9), lets a taxing authority audit the debtor, issue a deficiency notice, demand a return, or make an assessment without the stay in the way — though a lien from that assessment doesn't take effect unless the tax survives discharge and the property has already left the estate.

The remaining paragraphs cover narrower situations: securities and commodities settlements, HUD foreclosures on certain large insured properties, accreditation and licensing actions against educational institutions, and specific residential-eviction scenarios, among others. Because the list runs to 29 items covering unrelated fields of law, the only reliable way to know whether a specific act is excepted is to read the actual paragraph, not a summary of it.

How does a creditor get relief from the stay?

By asking the court, and the Code puts a clock on how long that request can sit unanswered. § 362(d) lets a party in interest move for relief "for cause, including the lack of adequate protection of an interest in property," or, for property the debtor has no equity in, on a showing that the property "is not necessary to an effective reorganization." (Narrower grounds exist for single-asset real estate and certain scheme-to-defraud filings involving real property, neither of which reaches an ordinary personal car loan.)

Once that motion is filed, § 362(e)(1) gives the court 30 days to rule — or to hold a preliminary hearing and set a further 30-day clock for the final hearing — and if neither happens, the stay lifts automatically for that movant. For an individual Chapter 7, 11, or 13 debtor, § 362(e)(2) adds an outer limit: the stay terminates 60 days after the motion is made unless the court rules within that window, the parties agree to extend it, or the court finds good cause for a specific extension. Filing the motion isn't free for the creditor, either: the Bankruptcy Court Miscellaneous Fee Schedule, issued under 28 U.S.C. § 1930, sets a $199 fee under item 19 for a motion to terminate, annul, modify, or condition the automatic stay. That is the amount on the schedule effective December 1, 2023, which is the version currently published; the schedule is revised periodically, so confirm it against the current posting. The same item charges no fee for a motion for relief from the Chapter 13 co-debtor stay.

What happens to the stay if you've filed bankruptcy before?

It shrinks or disappears, depending on how recently and how often a prior case was dismissed.

Both provisions carve out the same narrow exception: a case refiled under a chapter other than Chapter 7, after an earlier Chapter 7 case was dismissed under § 707(b) for abuse, doesn't count toward either the 30-day rule or the no-stay rule. And under § 362(i), a case dismissed "due to the creation of a debt repayment plan" doesn't trigger the § 362(c)(3) bad-faith presumption for whatever case the debtor files next, under any of chapters 7, 11, or 13.

How is the automatic stay different from the Chapter 13 co-debtor stay?

They protect different people. The automatic stay under § 362 protects the debtor. The co-debtor stay under 11 U.S.C. § 1301(a) — available only in Chapter 13 — separately protects a non-filing individual who is liable with the debtor on a consumer debt, or who put up collateral for it, such as a relative who cosigned a car loan. § 1301(a) says a creditor "may not act...to collect all or any part of a consumer debt of the debtor from any individual that is liable on such debt with the debtor," with two exceptions: the codebtor became liable "in the ordinary course of such individual's business," or the case is closed, dismissed, or converted to Chapter 7 or 11.

Chapter 7 has no equivalent protection for a cosigner. A Chapter 7 discharge releases only the filer's own personal liability, and the automatic stay itself, as explained above, reaches only the debtor's own pre-petition debts, not a codebtor's exposure on the same loan. Anyone with a cosigned car loan going into a Chapter 7 case should assume the cosigner remains fully on the hook throughout, unaffected by the filer's stay or discharge.

This page explains what § 362 does and doesn't do in general terms; it isn't legal advice about a specific case, a specific creditor's conduct, or whether a specific stay-relief motion will succeed. For the fuller Chapter 7 and Chapter 13 timelines the stay sits inside, see car loan after Chapter 7 bankruptcy and can you buy a car during Chapter 13. For what happens to the stay on a specific financed vehicle when the statement-of-intention deadlines are missed, see statement of intention. For whether any waiting period applies after a Chapter 7 discharge ends the stay, see is there a waiting period after discharge.