The Motion for Relief from Stay Regarding Collateral is a legal request filed in bankruptcy court. It seeks permission to bypass the automatic stay provision that prevents creditors from collecting debts. This motion is specifically aimed at enforcing rights against certain collateral that a debtor has secured through a loan or credit agreement.
This form is intended for creditors or parties with a legal interest in particular collateral used as security in a loan. Individuals or organizations who are currently involved in a bankruptcy case and wish to regain access to their secured assets should consider using this motion.
The Motion for Relief from Stay is applicable in various bankruptcy scenarios, particularly in Chapter 7 or Chapter 11 cases. It is utilized when a creditor believes that the debtor may not be able to adequately protect their interests, or when the debtor does not have equity in the collateral that is crucial for effective reorganization.
Several essential elements must be present in the motion to ensure its effectiveness:
When completing the motion, ensure that you avoid the following errors:
To effectively file a Motion for Relief from Stay, consider including the following documents:
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.
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.
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.
Filing a Motion and Setting a Hearing Date -- A Motion for Relief from the Automatic Stay is commenced by filing the appropriate motion and setting the motion for a hearing date. To file a Motion for Relief from the Automatic Stay, the Local Bankruptcy Rules require parties to use mandatory forms.
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.
Now the Bankruptcy Code provides that the automatic stay is terminated if a debtor fails to (1) file a timely statement of intention with the bankruptcy court to reaffirm, redeem, or surrender property, AND (2) take timely action to perform the stated intention.
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.