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Bankruptcy

automatic stays

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 South Dakota, as in all 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' 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 time to reorganize their finances without the pressure of creditor actions. It also ensures that all creditors are treated fairly by preventing one creditor from pursuing their own remedy against the debtor's property to the detriment of other creditors. Creditors can, in some cases, ask the bankruptcy court to lift the stay if they believe it is unjustly preventing them from enforcing their rights.

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Bankruptcy

automatic stays

Individual & Family Legal Plan

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South-Dakota State Code

South-Dakota State Code

Bankruptcy

automatic stays

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