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 Pennsylvania, as in all states, the automatic stay is a fundamental provision of federal bankruptcy law, specifically under 11 U.S.C. § 362 of the Bankruptcy Code. When a debtor files for bankruptcy, the automatic stay immediately takes effect, halting most creditors' attempts to collect debts. This means that lawsuits, wage garnishments, foreclosures, repossessions, and other collection activities must cease. The automatic stay is designed to provide a 'breathing spell' for the debtor, allowing them to work with their attorney to reorganize their finances without the pressure of impending creditor actions. It also helps to preserve the debtor's assets for the orderly distribution to creditors under the bankruptcy court's supervision. Creditors can petition the bankruptcy court for relief from the stay if they believe their interests are unjustly harmed. The scope and duration of the automatic stay may vary depending on the type of bankruptcy filed and the specific circumstances of the debtor's case.