Exceptions to Automatic Stay

The automatic stay prohibits a creditor with a claim against a debtor that arose before commencement of the bankruptcy case from requesting collection, initiating lawsuits, enforcing wage garnishments and repossessing or foreclosing.

According to §362(b) of the Bankruptcy Code, there are some statutory exceptions to the Automatic Stay. Certain actions are not stayed, including:

  • Criminal proceedings against the debtor.  Bankruptcy does not give any immunity from prosecution or criminal fines.
  • Actions by a lessor to obtain possession of nonresidential real property leased to a debtor under a terminated lease.  If there is a judgment against the lessee and the state law says that lessee can no longer reinstate the lease, lessee may be evicted despite a bankruptcy proceeding.
  • Government proceedings to enforce its police or regulatory powers.
  • Proceedings relating to child or spousal support, or establishment of paternity.  These are two specific items which, even if one is successful in a petition to declare chapter 7 bankruptcy, will not be discharged wither.

Inside Exceptions to Automatic Stay