Lift Stay Motions in Chapter 13: Filing a Response Need Not Be Difficult

by Craig Andresen, Minneapolis, MN, Bankruptcy Attorney

February 12, 2008

If you are in a chapter 13 case, you might eventually receive an ominous-looking document entitled “Motion for Relief From Stay,” or some similar caption. This multi-page document is filed by a secured creditor, such as your mortgage lender or car loan finance company, when it wants to obtain bankruptcy court permission to foreclose or repossess the collateral.

This is obviously a serious matter, bordering on disaster, for persons who need their chapter 13 case to pay off their mortgage back payments or vehicle loan. A lift stay motion is usually filed against you if you have fallen behind on house payments, or chapter 13 payments, or car payments if you are required to make them, during your chapter 13 case.

However, all need not be lost if you receive a lift stay motion. With the help of your bankruptcy lawyer, you can file a response to a lift stay motion, and ask for a hearing before the bankruptcy court judge.

The judge will usually deny the motion to lift the stay if you can catch up on the payments you have missed by the time of the hearing. You can even ask for extra time to catch up on payments, and the judge may allow this if your request is reasonable.

Often, the judge will require that you pay the bank’s attorneys fees incurred in bringing the lift stay motion, as a condition of denying the motion. This commonly results in an additional $250 to $750 for you to pay, which is certainly a negative result if your finances are already precarious. Additionally, your bankruptcy lawyer will usually charge a fee for helping you defend the lift stay motion.

If you receive a lift stay motion, the first to do is talk to your lawyer about defending against the motion. This may be a good time to re-evaluate your chapter 13 plan. You may even want to consider allowing the motion to be granted, and giving up the property at issue, especially if you can no longer afford to keep it.

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Craig W. Andresen is a consumer bankruptcy lawyer in Bloomington, Minnesota, with 22 years’ experience in consumer and small business bankruptcy cases. He is the Minnesota chair of the National Association of Consumer Bankruptcy Attorneys, and is a member of the Minnesota State Bar Association’s Bankruptcy Section. Mr. Andresen lectures often on the topic of consumer bankruptcy at local and national legal seminars.

Last modified: February 13, 2008