Area coverage: Missouri Counties of:
St. Louis County, St. Louis, Jefferson, St. Charles


The filing of a bankruptcy creates an Aautomatic stay,@ or an injunction, that prevents all creditors from any attempt to collect debts that existed before the case was filed.  These would include informal attempts through correspondence and communication as well as formal attempts like suits and foreclosures.   Even a pending lawsuit is stopped and trial dates are set aside.

Severe violations of this injunction may result in action by a bankruptcy trustee or the debtor seeking damages for contempt of court.  Incidental contact with the debtor, however, usually does not create any problem.

Unless the creditor gets specific approval of the Bankruptcy Court, which can happen, debts that are included in the injunction include for example:

  • Foreclosures and evictions
  • Repossession of a car
  • Disconnection of utilities for late payments
  • Collection of overpayment on benefits
  • Garnishments and attachments

There are certain exceptions, like: 

  • Domestic relations cases
  • Tax claims allowing a government entity to withhold refunds
  • Criminal cases
  • Automatic loan payments previously authorized to be deducted from wages or a retirement plan. 
  • A scheduled suspension of a driver=s license, professional or business license 

Unsecured creditors are limited to pursuing their remedies through the bankruptcy claims procedure. Secured creditors (mortgage holders, lien holders like auto liens) must seek court approval to proceed to avoid the Astay.@

Secured creditors are also treated differently relating to the collateral against which they have a lien.  A debtor in bankruptcy can only temporarily stop actions to enforce a mortgage or lien. The debtor must either surrender the collateral to walk away from the debt, or enter into an agreement to keep the collateral and Areaffirm@ the debt in spite of the bankruptcy. Contacts with the debtor to negotiate and finalize a Reaffirmation Agreement do not violate the automatic stay. Then the agreement must be in writing, approved by the debtor=s attorney, and submitted to the Court for approval before the case is closed.

Beware!  It is not uncommon for a debtor to assure certain secured creditors he is going to pay them in spite of the bankruptcy.  These assurances, even in writing, in the absence of the written Reaffirmation Agreement filed with the court, are not enforceable. Therefore the creditor can still foreclose.


Use of this Web Site and review of this Article does not create an attorney-client relationship. The law and its application by the courts is constantly evolving and changing. As with all memoranda in these archives, the discussion of the law is for general informational purposes, is in general summary form, is not to be taken as a definitive guide, and should not be relied upon to determine all fact situations. Each set of facts must be examined separately with the current case and statutory law analyzed and applied accordingly.

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