The filing of a bankruptcy petition automatically stays substantially all litigation, lien enforcement, or other activities that a creditor might undertake to enforce its claim against the debtor or its property. Section 362 of the Bankruptcy Code imposes the automatic stay; no court order is required. Moreover, the automatic stay applies in every bankruptcy case regardless of the chapter under which relief was sought and regardless of whether the case was voluntary or involuntary.
Want to learn more? Read Dealing With Distress For Fun & Profit – Installment #10 – About the Automatic Stay By George Kuney and Jonathan Friedland
Hajar is an associate with Sugar Felsenthal Grais & Helsinger LLP in both its Business Transactions Group and its Restructuring & Insolvency Group.