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 North Dakota, 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 that have filed for bankruptcy. This legal pause is triggered the moment a bankruptcy petition is filed with the court. The automatic stay is designed to provide a 'breathing spell' for the debtor, preventing foreclosure on their home, eviction from their apartment, disconnection of utilities, and the garnishment of wages, among other actions. It allows time for the debtor to work with their attorney to reorganize their finances or to develop a plan for repayment under the bankruptcy code. Creditors are prohibited from taking any action to collect debts without permission from the bankruptcy court, and violating the automatic stay can result in legal penalties. However, there are some exceptions to the automatic stay, such as certain tax proceedings, child support actions, and criminal proceedings, where actions may continue even after a bankruptcy filing.