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What is a motion to lift automatic stay?
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What is a motion to lift automatic stay?
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A motion to lift automatic stay is the creditor’s request to the U.S. Bankruptcy Court. Before the motion to life the automatic stay is requested, the debtor must file either chapter 7 or chapter 13 bankruptcy petitions. The petition has what’s called an automatic stay. The automatic stay instantly stops a creditor from starting, continuing or completing lawsuits, foreclosures (only with chapter 13) and garnishments. In other words, the U.S. Bankruptcy Courts requires all creditors listed stop all legal actions until the petition is discharged (completed) or dismissed. However, before those two aspects of bankruptcy can occur, the motion to lift the automatic stay can be requested. For instance, if a person files chapter 13 to stop a foreclosure, they are required to pay the bankruptcy trustee along the back payments and keep their mortgage payments current. However, if they miss those payments the creditor such as a bank or mortgage company can request the motion to lift automatic stay. This means that the U.S. Bankruptcy Court can eliminate the automatic stay even though the bankruptcy petition is still active. As the result of the motion, the creditor can continue with the legal action against the debtor. If the motion to lift the automatic stay is filed the debtor’s petition isn’t instantly dismissed.
There are things they can do to stop the motion. One of those things is to pay the arrearage. Another option is to consult a bankruptcy lawyer about other options.
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