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 Wyoming, as in all states across the United 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 actions such as foreclosures, repossessions, evictions, garnishments, utility shut-offs, and debt collection lawsuits are temporarily stopped. The automatic stay is designed to provide a 'breathing spell' for the debtor, during which they can 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 all creditors under the bankruptcy court's supervision. However, there are exceptions to the automatic stay, and certain actions by creditors may still be permissible with court approval or if the stay is lifted upon the creditor's request.