Automatic Stay

• Automatic stay protection is imposed on all creditors as soon as the bankruptcy case is filed. Wage garnishments, pending lawsuits and foreclosure proceedings, as well as other types of collection attempts must stop, according to 11 U.S.C. §362. Creditors are subject to being sanctioned by the bankruptcy court if they try to receive payment or repossess property from the debtor outside the permissible parameters of bankruptcy law. While the automatic stay is in effect, the debtor gets some breathing room from the barrage of creditors' calls and letters.
  
  

Discharge

• When the bankruptcy grants a discharge order, the debtor is not responsible for paying the discharged creditor claims included in the case. The debtor is essentially forgiven for amassing more debt than he could handle. Creditors violate the bankruptcy code when they still attempt to collect payment from the debtor after their claims were discharged. Debtors can request the court reopen the bankruptcy case and pursue injunctive relief against creditors who don't abide by the bankruptcy code.
  
  

Exceptions to Discharge

• The bankruptcy code does not discharge certain types of debts. The creditors assert their right to receive payment by filing a proof of claim with the bankruptcy court. Bankruptcy code provision 11 U.S.C. §523 holds debtors personally liable for debts associated with domestic obligations, taxes filed within the past two years and court fines. Creditors with debts that are typically classified as dischargeable can also seek payment for their claims if it appears the debtor abused the bankruptcy code and procured credit or money through fraudulent means. The bankruptcy code does not want to place creditors at a disadvantage when the debtor engaged in unethical or criminal behavior.
  
  

Motion for Relief from Automatic Stay

• Filing a motion for relief from automatic stay is a legal recourse available to secured creditors when debtors file for bankruptcy. Secured creditors place a lien on debtor's property as a form of collateral until full payment of a debt is received. Typically, liens are placed on property such as houses and cars. Secured creditors submit the motion for relief from automatic stay to the court when the debtor stops making payments for the loan during the bankruptcy or when the debtor wants to surrender the property. The motion requests the court remove the property from bankruptcy protection. The creditors can repossess the property and sell it to get some of their money back if the motion for relief from automatic stay is granted.