A Debtor's motion to extend automatic stay is a legal motion filed by a debtor in a bankruptcy case, requesting an extension of the automatic stay protection from creditors. The automatic stay is a court order that prohibits creditors from taking any action to collect debt from the debtor while the bankruptcy case is pending. In many jurisdictions, the debtor must file a motion to extend the automatic stay prior to expiration to continue its protection. The motion must include a detailed explanation of why the stay needs to be extended, such as the debtor's need for additional time to complete a reorganization plan or to resolve a dispute with a creditor. There are two types of Debtor's motion to extend automatic stay: one for Chapter 7 bankruptcy and one for Chapter 11 bankruptcy. In Chapter 7 bankruptcy, the debtor must demonstrate that continuing the stay is necessary to achieve a successful liquidation of the debtor's assets. In Chapter 11 bankruptcy, the debtor must demonstrate that continuing the stay is necessary to achieve a successful reorganization of the debtor's assets.
Debtor's motion to extend automatic stay
Description
Definition and meaning
A debtor's motion to extend automatic stay is a formal request filed in a bankruptcy court by a debtor seeking to maintain the protection that an automatic stay provides. An automatic stay halts actions by creditors to collect debts or repossess property during the bankruptcy process. This motion is particularly important when a debtor has had prior bankruptcy cases dismissed within a year, as they may need to demonstrate good faith and valid reasons for the new bankruptcy proceeding.
How to complete a form
Completing a debtor's motion to extend automatic stay involves several key steps:
- Provide the case number of any previous bankruptcy cases that concluded within the year before the current case.
- State the reasons for the dismissal of the prior case.
- Indicate whether the motion seeks a continuation of the stay against all creditors or specify particular creditors.
- Demonstrate good faith by presenting relevant facts showing that the current bankruptcy filing is legitimate.
- Complete the verification section, including signatures and dates.
Who should use this form
This form is intended for individuals or entities who have previously filed for bankruptcy and whose cases were dismissed. It is useful for debtors attempting to initiate a new bankruptcy case within a year of the dismissal and who wish to protect themselves from creditor actions through an automatic stay. Those who believe they can substantiate their good faith and meet the criteria required by the bankruptcy court should consider utilizing this form.
Key components of the form
A debtor's motion to extend automatic stay includes several vital components that are essential for the filing:
- Previous Case Information: Details about prior bankruptcy cases, including case numbers and reasons for dismissal.
- Creditor Information: Specify whether the motion is directed at all creditors or just certain ones.
- Good Faith Statement: A section where the debtor outlines the reasons why the current case is filed in good faith.
- Verification: Signatures of the debtor(s) confirming the accuracy of the information provided.
Common mistakes to avoid when using this form
When completing a debtor's motion to extend automatic stay, it is crucial to avoid the following common mistakes:
- Failing to provide accurate information about previous bankruptcy cases.
- Not clearly specifying which creditors are included in the motion, if not all.
- Neglecting to substantiate the claim of good faith adequately.
- Omitting signatures or dates in the verification section, which could invalidate the motion.
How to fill out Debtor's Motion To Extend Automatic Stay?
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FAQ
What are the exceptions to the automatic stay under 11 U.S.C § 362? Establishing paternity; Establishing or modifying domestic support obligations, including child support and alimony; Child custody or visitation matters; Divorce proceedings; Domestic violence matters.
Creditors Obtaining Relief From the Automatic Stay -- If a creditor properly files and serves a Motion for Relief from the Automatic Stay, and a bankruptcy judge grants the Motion, the Automatic Stay will either be removed or modified so that the creditor can resume collection efforts against the debtor.
The stay requires creditors to cease actions against the debtor and the debtor's property as described in 11 U.S.C. § 362(a). The stay continues until either the case is dismissed or closed or, in an individual case, until the granting or denial of discharge.
Motion for Relief from the Automatic Stay is a request by a creditor to allow the creditor to take action against the debtor or the debtor's property that would otherwise be prohibited by the automatic stay.
The most commonly sought exceptions are actions by parties to securities contracts to close out open positions; eviction of a debtor by a landlord where the lease has been fully terminated prior to the bankruptcy filing; actions by taxing authorities to conduct tax audits, issue deficiency notices, demand tax returns
The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions.
This Standard Clause for use in a forbearance or restructuring agreement provides for a defaulting borrower to waive its right to assert the automatic stay against a lender if it later files for bankruptcy. This Standard Clause has integrated notes with important explanations and drafting tips.
The automatic stay is an order that goes into place when you file for bankruptcy and stops most collection efforts. But the stay isn't absolute, and a creditor can ask the bankruptcy court to lift the automatic stay and allow collection efforts to resume.