A moratorium for almost all creditor litigation against a debtor in a Chapter 7 bankruptcy is referred to as which of the following?
A) A stop order
B) An automatic stay
C) A semi-automatic dismissal
D) A semi-discharge
E) There is no such moratorium in a Chapter 7 proceeding

Question

Quizplus · Accepted Answer

An automatic stay is a provision under the U.S. Bankruptcy Code that halts actions by creditors to collect debts from a debtor who has declared bankruptcy. This moratorium is designed to prevent creditors from taking legal or collection actions against the debtor while the bankruptcy case is being processed.

A Moratorium for Almost All Creditor Litigation Against a Debtor