Motion to Extend Automatic Stay and Notice of Motion

State:
Multi-State
Control #:
US-03255BG
Format:
Word; 
Rich Text
Instant download

Description

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.

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Key Concepts & Definitions

Automatic Stay: An injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under the U.S. Bankruptcy Code, this legal mechanism occurs automatically at the filing of a bankruptcy petition. Motion to Extend Automatic Stay: A legal document filed in a bankruptcy case requesting the court to extend the automatic stay beyond the usual period. This motion is often filed when the debtor faces multiple filings and the automatic stay might ordinarily be limited.

Step-by-Step Guide

  1. Review the Case Title and Defined Section: Identify the exact nature of the bankruptcy case and the specific sections of the Bankruptcy Code that apply.
  2. Prepare Motion Extend: Draft a motion to request the extension of the automatic stay. Include all relevant details such as the relief stay sought and the impact on the property estate.
  3. Electronic Filing: Utilize the court's electronic filing system to submit the motion. Ensure compliance with legal document rules and filing procedures.
  4. Notice to Governmental Units: Serve a notice of the motion to extend the automatic stay to all involved parties, including any governmental unit that may be affected.
  5. Attend Hearing: Appear at the scheduled court hearing to argue the motion and provide justification for the extension of the automatic stay.

Risk Analysis

  • Legal Risks: Incorrect filing or failure to notify relevant parties can result in denial of the motion, potentially exposing the debtors assets to collections and other legal actions.
  • Financial Risks: Without an extended stay, theres a risk that the property estate might be liquidated prematurely, harming the debtor's financial recovery and stability.
  • Compliance Risks: Non-adherence to electronic filing or legal document rules can similarly lead to procedural complications or sanctions.

Key Takeaways

  • The motion to extend automatic stay is critical in providing ongoing protection to a debtor in a bankruptcy case.
  • Understanding and adhering to the correct filing procedures and legal requirements is essential for a successful extension of the stay.
  • Electronic filing and timely notification to all parties, including governmental units, are crucial steps.

FAQ

What is the role of a governmental unit in the motion to extend automatic stay?

A governmental unit can be a creditor or interested party in a bankruptcy case. Its consent or objection can substantially influence the outcome of the motion.
How often is a motion to extend automatic stay granted?
It depends on the specifics of the case, including prior bankruptcy filings and the debtors current financial situation. Legal counsel can provide guidance based on precedent and local court tendencies.

Summary

The motion to extend an automatic stay and notice of such a motion are pivotal for debtors seeking continued protection under bankruptcy proceedings. Correct and timely filing, coupled with comprehensive preparation for the court hearing, can significantly increase the chances of court approval and ensure the debtor's assets are shielded from creditors during this crucial time.

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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.

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Motion to Extend Automatic Stay and Notice of Motion