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 New York, as in all states, the automatic stay is a fundamental provision of the federal Bankruptcy Code (11 U.S.C. § 362) that takes effect immediately upon the filing of a bankruptcy petition. The automatic stay halts most collection efforts, legal proceedings, and property repossessions or foreclosures by creditors, collection agencies, or government entities against the debtor. This 'breathing spell' allows the debtor time to reorganize their finances without the pressure of creditors' claims and provides an opportunity for the debtor to negotiate with creditors under the supervision of the bankruptcy court. The stay remains in effect until the bankruptcy case is resolved, the stay is lifted by the court, or the subject property is no longer part of the bankruptcy estate. Violations of the automatic stay can result in court sanctions against the offending creditor. It's important to note that certain actions are not stayed, such as criminal proceedings and some family law issues like child support.