Our Melbourne, FL Bankruptcy Attorney Explains: Understanding the Bankruptcy Automatic Stay

Attorney Beau Bowin
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Understanding the Bankruptcy Automatic Stay: Your Immediate Shield in Melbourne & Brevard County

The moment you file for Chapter 7 or Chapter 13 bankruptcy in the Middle District of Florida, federal law slams a nationwide “STOP” sign on almost every creditor you owe.  This federal injunction is called the "Automatic Stay."  The Automatic Stay is the single most powerful tool in the Bankruptcy Code—and it’s yours the moment we file.  Below is everything you need to know about the Automatic Stay—what it blocks, what sneaks through, and how it buys you breathing room to rebuild.

What Is the Automatic Stay?

11 U.S.C. § 362(a) creates an injunction the instant your petition hits the court’s electronic docketing system. No judge signs it, no hearing is required. The stay is automatic and immediate. Think of it as a federal force field that freezes:

  • Collection calls, letters, and emails
  • Wage garnishments (IRS, child support, student loans)
  • Bank account freezes or set-offs
  • Foreclosure sales (at least temporarily)
  • Repossessions and vehicle boots
  • Eviction lawsuits for unpaid rent
  • Utility shut-offs (for 20 days, then you must post a deposit)
  • Civil lawsuits asking for money judgments

There are many state and federal laws regulating debt collection, which can penalize creditors for predatory collection actions.  Unfortunately, debt collectors can typically ignore those collection laws with impunity.  Not the Automatic Stay.  Creditor will get hammered by the Bankruptcy Court if they violate the Automatic Stay.  They will stop their collections actions immediately upon notice.

What the Automatic Stay Stops in Brevard County

  1. Wage Garnishment from Old Medical Bills:
    A client in Palm Bay had $412 taken from every paycheck by Health First. The stay stopped it the same day we filed.
  2. Foreclosure by Rocket Mortgage or Wells Fargo:
    Brevard County foreclosure auctions happen every Wednesday at the Moore Justice Center. File on Tuesday → auction cancelled Wednesday morning.
  3. Car Repossession:
    One e-filed petition and the lender must return the car (or face contempt).
  4. Lawsuits Over Credit-Card Debt:
    Midland Funding and Portfolio Recovery file hundreds of suits in Brevard small-claims court. The stay freezes them dead.

What the Automatic Stay Does NOT Stop (Critical Exceptions)

  1. Criminal prosecutions – DUI restitution, bad-check cases, or probation violations march on.
  2. Child-support or alimony actions – Collection, modification, and paternity suits continue.
  3. Certain tax proceedings – IRS audits and tax-court cases are unaffected.
  4. Multiple filers – If you had a case dismissed in the last year, the stay lasts only 30 days unless we file a motion to extend. File three times? No stay at all without a hearing.
  5. Evictions (with a judgment) – If the landlord already won a final eviction order before you filed, the stay won’t stop the writ of possession. File early!

Practical Timeline After Filing in Melbourne

Day 0 (Filing Day)

  • 4:58 p.m. – You sign the petition and approve filing your Chapter 7 petition.
  • 4:59 p.m. – I hit “submit” on the ECF system.
  • 5:00 p.m. – The court issues a case number and the Automatic Stay is born.

Day 1

  • The bankruptcy court mails every creditor on your list with a Notice of Bankruptcy Filing.  All credit collections stop immediately.

Day 30-45

  • Trustee’s 341 Meeting of Creditors (held via Zoom for Brevard filers). Creditors rarely show.  The Chapter 7 Trustee represent the unsecured creditors.  He/She verifies the information in your petition is accurate and determine whether you have any assets not protected by a property exemption.  Click here to learn more about the property you can keep in a Chapter 7 bankruptcy.

Day 61–90

  • Chapter 7 discharge wipes out credit-card and medical debt. The Automatic Stay is replaced by a permanent discharge injunction. 

How Brevard County Clerks & Sheriffs Handle the Stay

The Brevard County Clerk’s office is lightning-fast. Once the stay hits, they cancel any scheduled foreclosure sale and any evictions.

Pro tip: Carry a timestamped copy of your filing notice in your car. If a repo man shows up at a shopping center in Viera, hand it over. They must release the vehicle on the spot. 
☑Ready to Trigger Your Automatic Stay Today?

Call us today at (321) 821-7440 to schedule a Free Consultation to discuss your case and how the Automatic Stay can help you stop your collection actions.

We are Brevard's Hometown Law Group.

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