👉 The bankruptcy fluid, often referred to as the "automatic stay," is a legal mechanism that immediately halts all collection activities against a debtor upon the filing of a bankruptcy petition. This stay applies to creditors, preventing them from pursuing legal actions such as lawsuits or foreclosures, and also stops the debtor from selling or transferring assets without court approval. This temporary protection allows the debtor time to reorganize their finances under bankruptcy laws, aiming to restore financial health while balancing the interests of creditors.
