Automatic Stay In Prosecuting the Bankrupt

In dealing with the bankruptcy regime, the legislator requires legal entities to manage this regime for specific purposes. One of these legal entities that plays a significant role is “automatic stay”. This legal entity is designed to prevent individual action of creditors. Different factors play a role in the efficiency and inefficiency of the automatic stay. The main reasons for efficiency are increasing the value of property of the bankrupt and reducing costs. The main cause of inefficiency is the redistribution of wealth. In Iranian law, a limited scope and the lack of enforcement of the automatic stay are regarded as main reasons for inefficiency of this legal entity. In the United States, the scope of automatic stay is wider than Iranian law, and this legal entity can be enforced in the former.The automatic stay is unavoidable in Iranian law, whereas there are different views in U.S. law in this regard.