About the automatic stay
Section 362(a) enumerates eight categories of conduct that are stayed by the filing of a bankruptcy petition. The list is broad: it covers commencement or continuation of any judicial or administrative proceeding against the debtor, enforcement of pre-petition judgments, any act to obtain possession of estate property, any act to create or perfect a lien against estate property, any act to collect a pre-petition claim, the setoff of pre-petition debts, and certain Tax Court proceedings. The stay applies regardless of whether the creditor has notice of the bankruptcy filing.
Section 362(b) carves out thirty enumerated exceptions, ranging from criminal prosecutions to domestic-support collection from non-estate property to certain regulatory enforcement actions by governmental units. The exceptions are statutory and narrow; a creditor who guesses wrong about whether an action is excepted faces sanctions for stay violation under section 362(k).
Relief from the stay is governed by section 362(d), which sets three grounds: cause (including lack of adequate protection), lack of equity and not necessary to an effective reorganization (for secured creditors), and various single-asset real-estate and serial-filer triggers. Procedure runs on a 30-day fast track under section 362(e) - if the court fails to conduct a preliminary hearing within 30 days, the stay terminates automatically as to the moving creditor.
Section 362 deep-dives
- Stay Scope and CoverageThe eight categories of acts stayed by section 362(a), who is protected (debtor only, vs. estate property, vs. co-debtor stays under 1201 and 1301), and the geographic reach.
- Stay Exceptions and ExclusionsThe thirty section 362(b) exceptions including criminal prosecution, domestic-support collection, governmental regulatory action, perfection of certain pre-petition liens, and tax assessment.
- Relief from StaySection 362(d) grounds for relief, the 30-day fast-track hearing requirement, adequate protection under section 361, and the special rules for single-asset real estate and serial filers under sections 362(d)(3) and 362(c)(3).
- Stay Violation RemediesSection 362(k) actual and punitive damages for willful violations, the standard for willfulness, the void-vs-voidable circuit split, and section 105(a) contempt as an alternative remedy.