There are two events in bankruptcy which bring collection efforts to a halt. They are very different in the way that they operate. The first is the automatic stay. The second is the discharge.

The automatic stay comes into effect at the time of filing. It basically tells your creditors that you have filed bankruptcy and is an order from the court that your creditors have to stop trying to collect their debts from you. (See the separate article on the effect of the stay for more detail) However, it only lasts as long as the bankruptcy is pending. If the case is dismissed the stay is dismissed with it. If your case is dismissed after filing there are penalties for re-filing. The second time the case is filed you have to ask for court permission to extend the stay beyond a thirty day period after the re-filing. The third time you file there is no stay after filing unless the court grants permission to put one place. Finally, the stay does not cancel the debt.

The discharge, again, is different. The discharge cancels the debt. The discharge is entered at the end of the case. At the same time the discharge is granted a permanent injunction (a permanent order from the court) is entered forbidding your creditors to ever try to collect the debt again. Like the automatic stay, if the creditors try to collect in violation of the discharge injunction, they will be fined and you will be awarded damages and attorneys fees.

The Fair Debt Collections Practice Act