The automatic stay provides a period of time in which all judgments, collection activities, foreclosures, and repossessions of property are suspended and may not be pursued by the creditors on any debt or claim that arose before the filing of the bankruptcy petition. A stay of creditor actions against the debtor automatically goes into effect when the bankruptcy petition is filed. The stay provides a breathing spell for the debtor, during which negotiations can take place to try to resolve the difficulties in the debtor's financial situation.

In Arizona, as in all states across the United States, the automatic stay is a fundamental provision of the federal Bankruptcy Code (11 U.S.C. § 362). When a debtor files for bankruptcy, the automatic stay immediately takes effect, halting most creditors from continuing with collection efforts, foreclosures, repossessions, and the enforcement of judgments. The purpose of the automatic stay is to provide a 'breathing spell' for the debtor by temporarily stopping all collection actions, allowing time to reorganize or negotiate with creditors under the protection of the bankruptcy court. Creditors are prohibited from taking any action to collect debts without first obtaining permission from the bankruptcy court. This stay applies to all types of bankruptcy filings and is intended to prevent creditors from taking unilateral actions that could disrupt the orderly resolution of the debtor's financial obligations through the bankruptcy process.