The automatic stay is a provision in U.S. bankruptcy law that halts all collection activities, including litigation, repossessions, and foreclosures, immediately upon filing a bankruptcy petition.
Chapter 7 of the 1978 Bankruptcy Act focuses on liquidation, which involves the sale of a debtor's nonexempt property and the distribution of the proceeds to creditors.
Involuntary bankruptcy occurs when creditors force a debtor into bankruptcy proceedings, typically under Chapter 7 or Chapter 11 of the U.S. Bankruptcy Code.
