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Simple English definitions for legal terms
automatic stay
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A quick definition of automatic stay:
Automatic stay is a rule that stops most creditors from trying to collect money from someone who has filed for bankruptcy. It starts as soon as the bankruptcy papers are filed. However, some creditors can ask to be allowed to keep collecting money if they think their property is not being protected. There are some exceptions to the rule, like when a landlord wants to evict someone who has already been told to leave or when the government needs to enforce its laws.
A more thorough explanation:
Automatic stay is a legal term that means when someone files for bankruptcy, most creditors are not allowed to collect money from them. This is called an "injunction." The automatic stay starts as soon as the bankruptcy petition is filed. However, some creditors can ask to be allowed to collect money if they think their property is not being protected well enough.
There are some exceptions to the automatic stay. For example, if someone owes rent to a landlord and the lease has already ended, the landlord can still evict them. Also, the government can still enforce its laws and regulations, like collecting taxes.
For example, if someone owes money to a credit card company and files for bankruptcy, the credit card company cannot try to collect the money during the automatic stay. However, if the person owes money on a car loan and is behind on payments, the lender can ask to be allowed to take the car back if they think their property is not being protected well enough.