What is a Motion to Lift the Automatic Stay

We get this question a lot, and I can understand why. So I wanted to take the time to explain what this means. As we know filing a bankruptcy petition creates a stay or protection from creditors. Once a case is filed the stay is in place and creditors must cease all collection activity. This includes repossessions, foreclosures, lawsuits, letters, calls, etc.

A motion to lift the automatic stay is a request by a creditor (it is almost always a creditor who requests this relief) to take a piece of property ( like a home or a car) out of the court's protection, so that the creditor can take action to get their collateral back. This request usually occurs when a debtor is facing foreclosure, and files a chapter 7 bankruptcy, instead of a chapter 13 bankruptcy because there is no plan to bring the home current. This request is usual occurs whe a debtor is far behind on an automobile and files a chapter 7. It happens when a chapter 13 petitioner stops making mortgage payments or plan payments.

When a motion to lift the automatic stay is filed by a crditor, the bankruptcy petitioner usually has 21 days to answer or object to the motion. If they do not object, the court will grant the creditors motion and the secured property will be lifted from the bankruptcy protection and the creditor will be free to repossess or foreclose. It is important to understand what the motion means, what collateral the creditor is asking for, and how much time the debtor has to deal with the motion. Talk to an experieced bankruptcy attorney in Mesa or Tempe today to understand your rights. Feel freee to call us at: 480-355-1377.