It stops nothing unless you get the timing just right.
We bankruptcy attorneys in Utah have a nice listserv with various questions we ask each other. Here is a question another attorney asked the bankruptcy bar:
I have some clients for whom we are preparing their third Chapter 13 in a little over 2 years. The two previous cases were dismissed for failure to make payments, due to a couple of unforeseen circumstances (most recently temporary reduction in income). They are 100% plans, and my clients should pay the total off in less than the 5 years, when we take the difference between I & J. The problem we are running into is that they are significantly behind on their mortgage, and with two other cases in the recent past, will they lose the house at auction? My understanding of the rule is that if you have had two cases active in the past year, there is no automatic stay for secured creditors. However, I am unclear on what would be considered active. Their earliest case was dismissed 1/15/13, but was not closed until 4/30/13. If we waited to file after 1/15/14, would the thirty day automatic stay be in effect? Or is the important date, the date on which the case was closed?
It goes from dismissal date according to a local bankruptcy court opinion, In Re Easthope 06-20366.
This means that if they file before the 15th, there is no automatic stay to protect the house. If they file after the 15th, the automatic stay stops the foreclosure sale.
This is not legal advice. If you need help go to www.robertspaynelaw.com.