Chapter 5, F. The Stay as It Applies to Actions Against the Debtor

• Jurisdiction: United States

F. The Stay as It Applies to Actions Against the Debtor

The stay is effective as to the recovery of a claim against the debtor that arose before the filing of the petition. It prevents the enforcement of a pre-petition judgment against the debtor or against property of the estate. The automatic stay has virtually the same effect as an injunction that prohibits collection under 11 U.S.C. § 524(a)(3).¹³⁰ The automatic stay arises by operation of law and is effective upon the filing of the petition for relief by the debtor, regardless of notice issues.

Application of the automatic stay would prevent an insurer from collecting pre-petition premiums owed by the debtor or from canceling a policy for nonpayment of premiums. All litigation then existing against the debtor is stayed as to the debtor, including all court filings and any discovery matters. A creditor cannot attempt to enforce a judgment obtained prior to the debtor's filing of bankruptcy. No action can be pursued against the debtor without first obtaining a modification of the stay from the bankruptcy court.

One exception to the operation of the automatic stay effective through BAPCPA is the commencement or...