It is generally accepted that the debtor may not waive the automatic stay. If the debtor affirmatively acts, such as by commencing litigation post-bankruptcy, the defendant is permitted to defend itself without running afoul of the automatic stay (although, in defining the parameters of a defense, many courts distinguish between mandatory counterclaims, which are allowed, and permissible counterclaims, which are not).
Although the Bankruptcy Code contains a fairly detailed list of actions which are and which are not precluded by the automatic stay, it does not address the ramifications of failing to abide by its dictates, except in one respect. Under Bankruptcy Code section 362(h), any “individual” injured by a willful violation of the stay is entitled to recover actual damages, including attorneys’ fees, and in appropriate circumstances, may recover punitive damages. However, other than providing for a remedy, the Bankruptcy Code does not explain whether actions taken in violation of the stay are void from their inception, and should be deemed never to have occurred, or whether such actions are merely voidable, such that they will be permitted to stand unless and until the debtor, the bankruptcy trustee or some other party-in-interest in the bankruptcy case complains to the court. The distinction is an important one, given the potentially significant legal and property rights and remedies connected with a wide variety of actions that arguably run afoul of the automatic stay, whether they be voluntary, involuntary, knowing or unknowing.
In Kalb v. Feuerstein, the United States Supreme Court examined the issue under the former Bankruptcy Act and held that actions in violation of the automatic stay are void. The circuit courts that have addressed this issue in the context of the present day Bankruptcy Code are split. The minority view is that an act taken in violation of the automatic stay is not void, but merely voidable. The Fifth and District of Columbia Circuits subscribe to this position. A majority of the circuits hold that an action in violation of the automatic stay is void ab initio, although some courts, like the Third Circuit, have recognized that the bankruptcy court’s power to grant relief from the stay retroactively may make a stay violation merely voidable under appropriate circumstances.