Section 16.13 Application of the Automatic Stay

• Library: Bankruptcy Practice (2007 Ed. + 2015 Cum Supp)

E. (§16.13) Application of the Automatic Stay

When debtors file for protection under the Bankruptcy Code, the automatic stay immediately applies to prevent creditors, including the government, from taking any actions against the debtors, their postpetition and exempt property, and property of the bankruptcy estate. 11 U.S.C. § 362. Thus, the IRS is prevented from seizing debtors’ property or estate property to satisfy its tax lien after the filing of the bankruptcy petition. Section 362(a)(3). The automatic stay also prevents the IRS from creating or perfecting a tax lien postpetition. Section 362(a)(4) and (5); Alpha-Bella VI, Inc., ex rel. United Jersey Bank v. Clinton Township, 14 N.J. Tax 597, 618 (1995). Moreover, the IRS cannot commence or continue a proceeding in the tax court against a debtor after a bankruptcy petition has been...