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 Hawaii, as in all states, the automatic stay is a provision under federal bankruptcy law that immediately stops most creditors from pursuing debt collection against individuals or entities once they have filed for bankruptcy. This is governed by 11 U.S.C. § 362 of the Bankruptcy Code. The automatic stay applies to various actions, including judgments, collection activities, foreclosures, and repossessions, and it is effective as soon as the bankruptcy petition is filed. The purpose of the automatic stay is to provide a 'breathing spell' for the debtor, allowing them time to reorganize their finances without the pressure of creditor actions. During this period, creditors are prohibited from initiating or continuing lawsuits, wage garnishments, or even making telephone calls demanding payments. The stay remains in effect until the bankruptcy case is closed, dismissed, or until the bankruptcy court grants a motion to lift the stay on a specific creditor's request.