After the filing of a bankruptcy petition, the debtor needs protection from the collection efforts of its creditors. Therefore, the bankruptcy law provides that the filing of either a voluntary or involuntary petition operates as an automatic stay which prevents creditors from taking action against the debtor. This is similar to an injunction against the creditors of the debtor. The automatic stay ends when the bankruptcy case is closed or dismissed or when the debtor is granted a discharge. Anyone who willfully violates the stay in the case of an individual debtor can be liable for actual damages caused by the violation and sometimes liable for punitive damages.
Motion to Extend Automatic Stay and Notice of Motion
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Description
Definition and meaning
The Motion to Extend Automatic Stay is a legal request submitted to the court that seeks to prolong the automatic stay period in a bankruptcy case. An automatic stay is an injunction that temporarily halts actions by creditors to collect debts from a debtor who has declared bankruptcy. This form is crucial for debtors seeking additional time to reorganize their financial affairs, ensuring that creditors cannot take action to recover debts during the extension period.
Key components of the form
The Motion to Extend Automatic Stay includes several critical sections:
- Case Information: Details about the bankruptcy case, including the case number and chapter.
- Debtor’s Identity: Information identifying the debtor, often including full name and address.
- Extension Request: A statement outlining the desired extension duration and reasons for the request.
- Good Faith Declaration: A declaration confirming that the motion is filed in good faith and serves the interests of affected creditors.
How to complete a form
Completing the Motion to Extend Automatic Stay requires careful attention to detail. Follow these steps:
- Enter the case information accurately, including your case number and bankruptcy chapter.
- Provide your personal details in the debtor’s identity section.
- Clearly state how long you wish to extend the automatic stay and explain the reasons for your request.
- Include a declaration affirming that your motion is made in good faith.
- Sign the form and date it to ensure it is valid.
Who should use this form
The Motion to Extend Automatic Stay is intended for individuals or businesses that have filed for bankruptcy and need additional time to manage their debts. This form is applicable to debtors who feel that their financial situation requires more time to develop a repayment plan or negotiate with creditors. It is particularly useful for those in Chapter 11 bankruptcy cases, where reorganization is pursued.
Common mistakes to avoid when using this form
When completing the Motion to Extend Automatic Stay, avoid these common pitfalls:
- Inaccurate Case Information: Ensure all case details are correct to prevent delays.
- Lack of Evidence: Provide sufficient justification for the extension request; vague reasons may lead to denial.
- Missing Signatures: Failure to sign the document can invalidate it.
- Ignoring Deadlines: Submit the motion in a timely manner to comply with court requirements.
What to expect during notarization or witnessing
While notarization is not always required for the Motion to Extend Automatic Stay, some courts may request it. If needed, you can expect the following:
- Presence of a notary public who will verify your identity.
- Signing of the document in front of the notary.
- The notary will apply their seal and sign the document, confirming its authenticity.
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FAQ
The automatic stay goes into effect for only 30 days after you file bankruptcy. Two or more previous bankruptcy cases dismissed within the past year. The automatic stay doesn't go into effect at all.
A motion for relief from the automatic stay is a creditor's way of asking the court for permission to eg. foreclose on a house or repossess a car. As soon as any type of bankruptcy is filed, an injunction called the automatic stay comes into place.
Upon filing a petition, an automatic stay is imposed. The stay requires creditors to cease actions against the debtor and the debtor's property as described in 11 U.S.C.Creditors may file a motion under 11 U.S.C. § 362 requesting the stay be lifted to allow them to pursue a particular piece of property.
Once they get a court order lifting the automatic stay, the creditor is allowed to move forward with the foreclosure or repossession of the property that secures the debt. The creditor does, however, still need to follow state law for their collection or eviction proceedings.
The automatic stay is an order that goes into place and stops most collection efforts during your bankruptcy.A creditor can ask the bankruptcy court to lift the automatic stay and allow collection efforts to resume. If successful, the creditor can continue pursuing its debt.
Once a Chapter 13 bankruptcy petition is filed, the automatic stay goes into effect with the order of relief being entered on the filing date. It's this automatic stay that prohibits the creditors from taking any further action outside the bankruptcy to collect monies that are owed to them from the debtor.
The automatic stay in bankruptcy is a temporary federal injunction that immediately stops most collection efforts by creditors, collection agencies and government entities against debtors and their property.It merely suspends efforts to collect or proceed against those debts while a bankruptcy case is open.
A Motion for Relief from the automatic stay is basically a request from a creditor to the Bankruptcy Court for permission to take back collateral. Motions for Relief are set down for hearings before the Bankruptcy Court.If a creditor has good cause for filing the motion, it will be granted.
How to Ask to Lift the Automatic Stay. The creditor must file a written motion with the court explaining the need to lift the stay. The burden is on the creditor to prove that good cause exists to lift the automatic stay. The creditor must also provide the debtor with notice of the motion and the hearing on the matter.