A Motion for Relief from the Automatic Stay imputed in bankruptcy is filed by a Creditor, usually a mortgagee or automobile lender, and alleges that the Petitioner in Bankruptcy has fallen behind on post-petition mortgage or vehicle payments. For example, if a Petitioner files a Chapter 13 Bankruptcy Plan and fails to make their post-petition mortgage or vehicle payments, it is foreseeable that after two or more missed payments that a Motion for Relief from the Automatic Stay would be filed under 11 USC 362(a). The purpose of the Motion for Relief from the automatic stay is for a creditor to commence or continue a proceeding to collect a debt against the Petitioner during the pendancy of the Bankruptcy proceeding, in the form of a mortgage foreclosure or vehicle repossession. Motions for relief may be litigated or settled through Stipulation between the parties. In the event the Petitioner in bankruptcy did fall behind on mortgage or vehicle payments post-bankruptcy filing, the creditor is usually agreeable to enter into a Stipulation once an answer to the Motion is filed.
Stipulations generally include:
a. one-time cure of the post-petition deficiency
b. 3 month cure
c. 6 month cure
d. Capitalize the deficiency into the remaining term of the Bankruptcy Plan (requires a Motion in a confirmed plan)
It is extremely important to answer or object to a Motion for Relief in bankruptcy. Under local rule 9014-1 a certificate of no response can be filed for the Petitioner’s failure to respond and subsequently the relief requested will be granted to the Creditor/Movant by the Bankruptcy Court. If you have any questions how to defend against a Motion for Relief from the Automatic Stay or any creditor action related thereto, please contact the Attorneys at Sadek Bankruptcy Law Offices.
Call for a free consultation today and speak with one of our experienced Attorneys at Sadek Bankruptcy Law Offices to discuss the debt relief solutions that you are entitled to.
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