Automatic Stay in Bankruptcy - How Long Does the Automatic Stay Last?

The automatic stay in bankruptcy is a powerful consumer protection device. Contained in Section 362 of the U.S. Bankruptcy Code, it halts most creditor actions against you from the moment your case is filed. But the automatic stay doesn't last forever.

In general, the automatic stay ends when one of these three actions occurs:

  1. when your case is closed;
  2. at the time of dismissal of your case; or
  3. when your discharge is granted or denied.

If the bankruptcy discharge is granted and the case is closed then the automatic stay becomes permanent in the form of the discharge injunction. If the case is dismissed or the discharge is denied then creditors may take action against you. But the automatic stay may end early if you filed a previous case within the past year. For example:

If you have filed one Chapter 7, 11, or 13 case that was dismissed within the past year, the stay with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease ends on the 30th day after the filing of the later case unless the court orders otherwise.

If you have filed more than one Chapter 7, 11, or 13 case that was dismissed within the past year, you do not get the protection of the automatic stay unless the court orders otherwise.

Your creditors may also, under certain circumstances, request that the bankruptcy court lift the stay to enable them to take action against you or your property. There are specific requirements governing their ability to do so, and the court will require certain proof before lifting the stay.

In general, the motion for relief from stay (that's what it's called) will be filed by a mortgage company or car lender when you fall behind on your payments. They will want to get the stay lifted so they can either begin or continue foreclosure proceedings, or repossess the property immediately.

Motions for relief from stay are also sometimes filed when you're being sued by someone prior to filing your case, or in other limited situations. Credit card companies and other unsecured creditors usually won't file a motion for relief from stay because there's nothing to be gained from doing so; in a Chapter 7 case your debt will be discharged within a few short months anyway.

Even if the automatic stay is lifted, that does not mean your bankruptcy case will fail. You may still be able to get a discharge of your debts; the discharge injunction will effectively re-impose the prohibition against taking action against you.

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