Relief From The Automatic Stay Of The Bankruptcy?

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Relief From The Automatic Stay Of The Bankruptcy?

Call: 888-297-6203

Most measures taken against a debtor or their property are immediately postponed (put on hold) when a bankruptcy petition is filed.

Even if the creditor is unaware of the stay at the moment, it is still in effect. The stay applies to things like garnishing wages, litigation, and foreclosures. The stay is intended to protect the debtor’s assets and allow them some time away from the court case.

When is “relief” from that stay available to creditors?

A creditor must demonstrate to the bankruptcy judge that there is “cause” for the granting of relief in order to be granted permission to proceed against the person who filed for bankruptcy or the debtor’s property.

Providing evidence that a creditor’s interest in a specific piece of property is not “adequately protected” or that the debtor has no equity in it and that the property is not required for a reorganisation are two examples of circumstances.

The secured creditor is typically the one seeking relief from stay in order to foreclose on real estate or reclaim a vehicle. In many cases, creditors can get an exemption from the stay in order to foreclose on a debtor’s non-equity or uninsured property.

When the equity cushion (the difference between the creditor’s claim and the value of the property) is modest, the debtor might need to provide the creditor with “sufficient protection payments” in order to maintain the equity cushion for the benefit of the creditor as a whole.

If you happen to be around Dallas or Los Angeles area and need the services of an experienced bankruptcy attorney, you may call Recovery Law Group at (888-297-6203). Go to the following link to schedule an online appointment or learn more:

Creditors may occasionally ask for a stay of proceedings so they can seek the debtor’s insurance. In most cases, such relief is provided in exchange for the creditor’s agreement to restrict the collection of his judgement to the insurance.

In a multi-party action when the claimant does not want the debtor to be a party to the trial, this is another frequent circumstance where a creditor could ask for relief from the automatic stay (which would be the result if the stay is not lifted).

The judges’ approaches to these situations differ; some courts demand that the debtor be excluded from the case and that the trial only include the other defendants; other judges give relief with certain limitations on the creditor’s rights against the debtor should the creditor obtain a judgement.

The court may give relief at the initial hearing or schedule an evidentiary hearing to reach a final determination. Relief from stay requests are typically heard on short notice (10–20 days); either option is possible.

At the conclusion of the normal individual bankruptcy case, the discharge injunction takes the place of the automatic stay.