Automatic Stay

Scope, in the statute’s words

• Triggered by “a petition filed under section 301, 302, or 303 of this title” (voluntary, joint, and involuntary cases). (11 U.S.C. 362(a))

• “Applicable to all entities.” The statute’s own scope language; it doesn’t sort creditors by type. (11 U.S.C. 362(a))

• Chapter 13 has a separate codebtor stay in 11 U.S.C. 1301, which refers to “a consumer debt of the debtor.”

• Teams often review how this applies to their accounts, debt types, or co-obligors with their compliance team or counsel.

What the statute covers

• What it stays. Section 362(a) lists eight categories. Among them: “the commencement or continuation” of actions or proceedings against the debtor (a)(1); enforcement of pre-petition judgments (a)(2); “any act to obtain possession of property of the estate” (a)(3); acts to create, perfect, or enforce liens (a)(4) and (a)(5); “any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title” (a)(6); and “the setoff of any debt owing to the debtor that arose before the commencement of the case” against a claim against the debtor (a)(7).

• Exceptions. Section 362(b) lists acts that the filing “does not operate as a stay” of. The list itself is long and specific.

• How long it lasts. Under 362(c)(1), the stay of an act against estate property “continues until such property is no longer property of the estate.” Under 362(c)(2), the stay of any other act continues until the earliest of the case being closed, the case being dismissed, or, “if the case is a case under chapter 7 of this title concerning an individual or a case under chapter 9, 11, 12, or 13 of this title, the time a discharge is granted or denied.”

• Prior cases. Sections 362(c)(3) and (c)(4) contain separate provisions for individual debtors who had one or more prior cases pending within the preceding one-year period that were dismissed. Section 362(j) provides for an order confirming that the stay has been terminated, on request of a party in interest.

• Relief from stay. Section 362(d) sets out when the court “shall grant relief from the stay,” on request of a party in interest and after notice and a hearing.

• Damages. Section 362(k)(1): “Except as provided in paragraph (2), an individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorneys’ fees, and, in appropriate circumstances, may recover punitive damages.”

• Notice. Section 342 of the Code addresses notice to creditors, including effective notice and its relationship to monetary penalties. How 342 and 362 interact is a question for counsel.

What it means for AI agents and automation (operations questions)

An agent will keep working an account until something tells it to stop. That raises design questions:

• Is bankruptcy status checked before every outbound action? What happens when it’s “unknown” or “stale”?

• When bankruptcy language comes up in a conversation (“I filed,” “my bankruptcy lawyer,” “I have a case number”), does the agent stop the collection conversation, flag the account, route it to a human, and log the exact words and timestamp? Compliance decides what happens next.

• Are the feeds that set the flag monitored? When the BNC went offline in October 2026, creditors relying on its notices lost that signal while courts kept accepting filings. Would a feed going quiet raise an alert, or read as good news?