What is a Stay of Proceedings?

What is a Stay of Proceedings?
Stay of Proceedings

When a “Stay of Proceedings” is in effect, creditors cannot “commence or continue any action, execution, or other proceedings, for the recovery of a claim provable in bankruptcy.”  In other words, all creditor action is paused.
Making an assignment in bankruptcy or consumer proposal creates a “Stay of Proceedings” in accordance with section 69 of the Bankruptcy and Insolvency Act.  Only a Licensed Insolvency Trustee, like Steve Welker and Company, can help you obtain this legal protection.
A Stay of Proceedings:
1) Stops creditors from suing you; and
2) Stops garnishments of your wages or bank account.

When a Stay of Proceedings Doesn’t Apply

The Stay ceases in a few unusual cases including when:
1) The debtor files a second consumer proposal within six months of their first consumer proposal.
2) Creditors are secured by the debtor’s assets (e.g. Mortgage Companies and Car Financing Companies).
3) The Court determines that an individual is likely to be materially prejudiced by the stay.
4) The Trustee or Proposal Administrator obtain their discharge.


If you have creditors breathing down your neck and need to stop them in their tracks before they garnish your wages or bank account and prevent you from making ends meet, then give us a call.  We offer free consultations and will take the time to review your situation and explain your options.  Use our contact form below, and let us impress you with our prompt response or give us a call.