Bankruptcy Lawyer

Get Relief from Automatic Stay

When a debtor files for Bankruptcy the automatic stay takes affect. It provides protection for both the debtor and the creditors. Further, it means that no creditor can take any action to collect on a debt. In addition, a creditor cannot take back any property which is in possession of the debtor. A creditor first needs permission from court before doing any collection efforts. The automatic stay is broad in scope. The exceptions, on the other hand are narrowly drafted.

However, a creditor has some relief options which it can use to get relief from an automatic stay. To obtain relief, the creditor must file a motion to request relief, which is done soon after the debtor files for bankruptcy. The Bankruptcy Code provides creditors with various methods for obtaining relief from this automatic stay. However it only applies to the creditor that filed a motion for it. Talk to our bankruptcy lawyers today!

How is a Motion for Relief from the Automatic Stay Begun?

A motion is a written formal statement in which a party requests some relief from the Court. Each motion should support all documents which show that there is a lack of adequate protection or equity in the property. After looking at the motion documents and bankruptcy filing, a court may grant relief from an automatic stay under certain circumstances. For example, when a bank has a lien on a property but the value of it is less than the declared debt.

Generally, these cases move through the courts slowly. Federal bankruptcy judges have 30 days to set a preliminary hearing for the motion. In addition, the court has an additional 30 days to set a final hearing.

If you want to file motion to request to relief from an automatic stay then please contact us. We have a team of qualified attorneys who can help you in this effort.

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Ocean County Bankruptcy Lawyer can help when you get notice from the bankruptcy court that a debtor has filed bankruptcy or you have knowledge otherwise, that a debtor filed bankruptcy call and talk to a bankruptcy attorney today.

Prepare to explain to the bankruptcy attorney the basis of your claim against the debtor and why you are entitled to payment. If you have the docket number or the debtor’s name, provide it to the attorney so he/she can review the filings on-line. One of our experienced attorneys will determine whether you should seek relief from the stay, or whether you may need to file an Adversary Proceeding – seeking a court determination that the discharge injunction will not apply to your claim. Both have costs associated with them (at a minimum, a filing fee). There are a number of discharge exceptions in the bankruptcy code. Some require the creditor to file an Adversary Proceeding.

What is the Federal law on relief from the bankruptcy stay?

§362(d) Relief From the Automatic Stay – Section 362(d) of the Code permits a creditor affected by the stay to request relief there from.

  • For Cause, including lack of adequate protection;
  • Debtor’s lack of equity in property if such property is not necessary to a effective reorganization;
  • In Single Asset Real Estate cases (§101) the creditor secured with such asset may request the remedies based on the timing of the filing of a feasible plan, or commencement of post-petition (pre-confirmation) payments by debtor. Debtor is given specific periods within which: the plan must be filed (and deemed confirmable); or to start payments.
  • In Rem Orders recordable, and effective for 2 years, in future cases. Secured creditors may obtain these orders in certain circumstances (schemes to delay, hinder and defraud creditors)§362(b)(20) in conjunction with §362(d)(4) [added by BAPCPA – 2005]
The automatic stay takes effect immediately upon the filing of a bankruptcy petition, and regardless of any formal notice by the court or actual knowledge on the part of the creditor. The consequences of violating the stay may vary depending on the actual knowledge by the transgressor.
The automatic stay is not intended as a permanent or immutable bar. The basic purpose of the stay is to provide a temporary relief to the debtor in order to permit an orderly reorganization or liquidation of the assets without the disruptive and inequitable results of allowing a race of diligence between creditors. As opposed to the discharge, the stay is intended to affect rights on a temporary and procedural basis.
First thing to do is calendar the deadline to file a proof of claim. If this deadline is missed you will only be allowed to file late if you can meet the excusable neglect standard. Pioneer Inv. Servs. v. Brunswick Associates, 507 U.S. 380 (1993). Avoid this by staying on top of your claim and having filed timely.
Yes, but then remember that your only relief will be against any insurance policies available to cover your claim. . Many Chapter 7 trustees will consent to lift the bankruptcy stay if the plaintiff waives its claim against the bankruptcy estate and limits recovery to available insurance. Before making a decision to waive a claim, you must know if there is insurance coverage. If you cannot negotiate an order, you will need to file a motion with the bankruptcy court to obtain an order to lift the bankruptcy stay.

As a general rule, the filing of a bankruptcy petition operates to stay litigation involving prepetition claims against the debtor. (Midlantic Nat’l Bank v. N.J. Dep’t of Envtl. Prot. (1986) 474 U.S. 494, 503.) However, the automatic stay can be lifted, so long as an interested party can demonstrate “cause” as discussed above in Section 362(d) of the Code. (See (2006) 11 U.S.C. §362(d)(1). Such cause can be shown by showing how your claim fits within the “Curtis Factors” as discussed below. The decision whether to grant relief from a stay is “within the broad discretion of the bankruptcy court.” (Truebro, Inc. v. Plumberex Specialty Prods., Inc.) Where litigation is pending, courts may weigh twelve nonexclusive factors, known as the “Curtis” factors, in deciding whether to grant relief from an automatic stay:

  • Whether the relief will result in a partial or complete resolution of the issues;
  • The lack of any connection with or interference with the bankruptcy case;
  • Whether the foreign proceeding involves the debtor as a fiduciary;
  • Whether a specialized tribunal has been established to hear the particular cause of action and whether that tribunal has the expertise to hear such cases;
  • Whether the debtor’s insurance carrier has assumed full financial responsibility for defending the litigation;
  • Whether the action essentially involves third parties, and the debtor functions only as a bailee or conduit for the goods or proceeds in question;
  • Whether the litigation in another forum would prejudice the interests of other creditors, the creditors’ committee and other interested parties;
  • Whether the judgment claim arising from the foreign action is subject to equitable subordination under Section 510(c);
  • Whether movant’s success in the foreign proceeding would result in a judicial lien avoidable by the debtor under Section 522(f)10;
  • The interests of judicial economy and the expeditious and economical determination of litigation for the parties;
  • Whether the foreign proceedings have progressed to the point where the parties are prepared for trial, and
  • The impact of the stay on the parties and the “balance of hurt.”

If you require assistance in getting relief from an automatic stay, call our experienced bankruptcy relief from automatic stay attorneys today and we will fight the get your claim out of the bankruptcy.

Call one of our Trenton relief from the automatic stay attorneys today!

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(732) 646-5529 or (732) 64-NJLAW.