Exceptions to the Automatic Stay: When Creditors Can Still Act

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When filing for bankruptcy, the automatic stay serves as a crucial legal shield against creditor actions. However, it’s essential to understand the exceptions to this protection, as certain actions can still proceed. Consulting an experienced bankruptcy attorney near you can help you navigate these complexities and safeguard your financial future.

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Discover the important exceptions to the automatic stay that allow creditors to act even after filing for bankruptcy. Understanding these exceptions can help you navigate your financial situation more effectively. Consult with a bankruptcy attorney near you for expert guidance on protecting your rights.

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Flat vector illustration showing a person protected by an 'Automatic Stay' legal shield from some creditor actions like garnishments and lawsuits, while exceptions like child support, criminal proceedings, and IRS audits pass through, with a bankruptcy attorney near them explaining the legal nuances.

Bankruptcy Law

What Actions Does the Automatic Stay Prevent?

Exceptions to the Automatic Stay: When Creditors Can Still Act

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Automatic Stay: Your Temporary Shield from Creditors

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Mar 30, 2025 06:21 PM

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Exceptions to the Automatic Stay: When Creditors Can Still Act

The automatic stay is a powerful legal shield that protects you from most collection actions the moment you file for bankruptcy. But as strong as it is, it’s not bulletproof. There are important exceptions to the automatic stay—times when creditors are legally allowed to continue certain actions.

Understanding these exceptions is critical to managing your expectations and ensuring you’re fully protected where possible. In this post, we’ll break down when creditors can still act and how a bankruptcy attorney near you can help you navigate these tricky situations.

💡 For every post in this series, scroll down to “Related Posts.”

What the Automatic Stay Typically Covers

As explained in What Actions Does the Automatic Stay Prevent?, the automatic stay can:

Halt lawsuits and garnishments

Pause foreclosures and repossessions

Stop collection calls and creditor contact

Delay utility shutoffs and evictions

But these protections aren’t universal. Certain types of debts and legal actions fall outside the stay—or are subject to creditor motions to lift it.

Exceptions: When the Automatic Stay Doesn’t Apply

1. Criminal Proceedings

Bankruptcy cannot stop criminal charges or court orders related to criminal acts. For example:

Fines or restitution for criminal activity

Jail time for unpaid criminal penalties

2. Child Support and Alimony (Domestic Support Obligations)

The stay does not halt obligations for child support or spousal maintenance. Actions allowed include:

Wage withholding for support payments

Collection efforts for ongoing or back support

Modifications to support orders

3. Tax Audits and Filings

While the IRS must stop collection actions, it can still:

Conduct audits

Send deficiency notices

Require tax return filings

4. Evictions in Certain Circumstances

If a landlord already obtained a judgment of possession before you filed bankruptcy, the eviction can usually proceed.

Exception: If state law allows a tenant to “cure” the default, the stay may still offer temporary protection.

5. Pension Loan Repayments

Repayments automatically deducted from your paycheck for loans from retirement accounts (e.g., 401(k)) generally continue during bankruptcy.

6. Multiple Bankruptcy Filings (Repeat Filers)

If you’ve filed bankruptcy more than once in the past year, your automatic stay may be limited:

One previous case: Stay expires after 30 days unless extended by court motion

Two or more cases: No stay at all unless you file a court motion to impose it

7. Motions to Lift the Stay

Even in protected situations, creditors can file a motion to lift the stay if:

They risk financial loss (e.g., property depreciation)

You’re behind on payments for secured assets

The property is not essential to your reorganization plan

The court may grant the motion, allowing the creditor to resume collection or foreclosure.

Why Legal Guidance Is Essential

When exceptions apply or creditors try to bypass the stay, you need an advocate. A bankruptcy attorney near you can:

Clarify what’s protected and what isn’t

Help you oppose motions to lift the stay

Ensure your rights aren’t violated

Without legal guidance, you may mistakenly assume you’re protected—and suffer consequences.

ReferU.AI Makes It Simple to Get Help

ReferU.AI connects you with a bankruptcy attorney near you who understands the ins and outs of automatic stay exceptions. Our platform finds experienced legal support to help you defend against aggressive creditors and stay in control of your case.

Final Thought: Know the Limits, Maximize the Protection

The automatic stay is a powerful tool—but only if you understand where it begins and ends. Knowing these exceptions can help you manage expectations, plan ahead, and safeguard your financial fresh start.

Exceptions to the Automatic Stay: When Creditors Can Still Act