The automatic stay is, perhaps, the greatest advantage to filing for Bankruptcy. This is the requirement that upon filing, no-one can do anything to collect a debt, enforce a judgment, garnish your wages, take your property or that sort of thing. There are, of course, exceptions such as the requirement to keep paying child support.
In order to lift the stay so a car company can pick up your car or a mortgage company can go forward with a foreclosure, a motion must be filed in court and heard by a judge. Thus, you get the opportunity to convince the court that the creditor is wrongfully trying to take your property, or you aren’t really behind in your payments, or any other defense to the motion.
This can give you the time to get caught up, or even to refinance your home. In fact, in a Chapter 13 bankruptcy it’s pretty hard for a mortgage company to do anything if you are making and continue to make reasonable payments.
If you have filed bankruptcy, don’t be surprised to see a creditor file a motion like this. They are trying to make sure that you keep making any payments that are due and that the property isn’t wasting away while they wait out the bankruptcy process. You do have to respond to the motion, however, and that’s one area where a competent bankruptcy attorney is a necessity.
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Last modified: April 11, 2013