Duhaime's Law Dictionary

Automatic Stay Definition:


In the United States Code, at Title 11 (Bankruptcy), an automatic stay is defined a §362 as a statutory injunction against all efforts outside of the bankruptcy proceedings to collect a debt against the bankrupt.

The stay is automatic in that it takes effect from the moment of filing the bankruptcy petition.

There are some notable and sensible exceptions such as child support or spousal support enforcement proceedings.

The concept of an automatic stay is typical but not necessarily presented using the term automatic stay.

In Canada, the Bankruptcy and Insolvency Act (at §69), provides for essentially the same statutory injunction except it calls it a stay of proceeding; that from the moment a bankruptcy filing is made:

"... no creditor has any remedy against the insolvent person or the insolvent person’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy."


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