Automatic Stay

• When a debtor files for bankruptcy, the court issues an automatic stay. An automatic stay immediately stops collection activities. Creditors can no longer contact the filer about the debt.
  
  

Lawsuits

• Under the bankruptcy code, once a debtor files for bankruptcy, a creditor may not file a lawsuit or proceed with a lawsuit already filed against the debtor. If the court dismisses the debtor's bankruptcy case or the debtor no longer has the protection of the stay, a creditor can proceed with a pending lawsuit or file a lawsuit against the debtor.
  
  

Judgments

• Bankruptcy prevents the enforcement of a judgment, stop wage garnishments and removes liens on a home if it has been protected by a homestead exemption. In Chapter 7 bankruptcy, nearly all money judgments are eligible for discharge. In Chapter 13, the debtor may be able to pay the judgment amount in a court-approved payment plan.