Automatic Stay in Bankruptcy

When you file for Chapter 7 Bankruptcy or Chapter 13 Bankruptcy, a court order to stop any action to collect debts owed to creditors goes into immediate effect. This is known as an Automatic Stay.

After filing for bankruptcy, an Automatic Stay can provide debtors with relief from creditors trying to collect payments, and allow them some time to regroup during the bankruptcy.

Motion to Lift the Automatic Stay from Creditors

Although the Automatic Stay can provide a certain amount of relief to debtors, it is not absolute. Creditors can file a motion with the Bankruptcy Court to lift the Automatic Stay.

Creditors must first obtain permission from the Bankruptcy Court before they proceed to collect any debt. Regardless of where the creditor is located or where the debt collection is taking place, they must gain permission from the Bankruptcy Court where the bankruptcy was filed.

Creditors are denied permission to resume collecting debt in most cases, and the Automatic Stay is usually not lifted.

When a creditor files a motion to lift the Automatic Stay, the debtor is entitled to a notice and a hearing. The creditor must then prove that there is good reason to lift the stay, and the Bankruptcy Court is most likely to continue the bankruptcy protection in almost all cases.

Bankruptcy Legal Help

If you are facing or considering filing for bankruptcy, we can help. Our skilled and experienced bankruptcy lawyers have dealt with hundreds of cases like yours, and we can help you achieve relief from your debt.