The Oklahoma Bar Journal December 2023

Most commonly for lawyers, the automatic stay will become relevant if someone who owes the lawyer money, someone who owes the law yer’s client money or someone who is a party to litigation involving the lawyer files for bankruptcy. Clearly, collection activity must stop. Section 362(a) prescribes attempting to col lect on a “claim” in multiple places. A “claim” is also a defined term in the Bankruptcy Code:

(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and (8) the commencement or continuation of a proceed ing before the United States Tax Court concerning a tax liability of a debtor that is a corporation for a taxable period the bankruptcy court may determine or concern ing the tax liability of a debtor who is an individual for a taxable period ending before the date of the order for relief under this title. 1

The first thing to notice is that the stay applies to “all entities” (tail end of Subsection (a)). Entity is a defined term in the Bankruptcy Code: (15) The term “entity” includes person, estate, trust, governmental unit, and United States trustee. 2 So, basically, the automatic stay applies to everybody, not just par ties to the bankruptcy. There is also no requirement that the affected “entity” have notice of the bank ruptcy filing. 3 The automatic stay simply applies. To quote the defini tion I give my clients, “It goes into effect automatically, and it stays all collection activity against the debtor or property of the debtor.”

(5) The term “claim” means—

(A) right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contin gent, matured, unmatured, disputed, undisputed, legal,

Statements or opinions expressed in the Oklahoma Bar Journal are those of the authors and do not necessarily reflect those of the Oklahoma Bar Association, its officers, Board of Governors, Board of Editors or staff.

DECEMBER 2023 | 25

THE OKLAHOMA BAR JOURNAL