What On Earth Is A Motion For Relief From The Automatic Stay in Bankruptcy?

What on earth is a motion for relief from the automatic stay in bankruptcy? In bankruptcy, like any other legal field there is legal jargon that is often hard to recognize unless you spend your days in the trenches like we bankruptcy lawyers do. When a petition for bankruptcy is filed with the bankruptcy court, debtor automatically invokes a court ordered injunction against all her/his creditors barring the creditor from doing all sorts of things to debtor to try and collect on a pre-petition debt. This court order is called the automatic stay. It is a powerful weapon against creditors who are abusive and threatening. The automatic stay legally prevents creditors from collecting from debtors. It is a time out if you will.

A motion for relief from the automatic stay is a request from a creditor to the bankruptcy court to lift or remove the automatic stay so the creditor can do something. That something is usually to enforce their security interest like repossessing a car if you are not making payments on it or to commence foreclosure proceedings against a home you are delinquent on. These are the two most common types of motions for relief we see. Vehicles especially are a rapidly depreciating asset and creditors do not want debtors to remain in possession of a vehicle that is depreciating rapidly while no payments are being made on the loan. Creditors will try and quickly act to get this vehicle back so they can auction the vehicle off and recoup as much money on the loan as is possible.

If you get a motion for relief, immediately call your attorney.

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