You filed for Chapter 7 bankruptcy yet you’re still getting notices in the mail from the people you owed money to. What’s the deal?
You’re not alone. Most people who file for Chapter 7 bankruptcy get notices in the mail 30 to 90 days after the case is filed. Most people have no idea what it is.
Chances are, its a Motion for Relief of Stay (MFRS). Your bankruptcy lawyer probably explained that this would happen, but it’s easy to forget. After all, there’s so much information to take in when you’re getting ready to file your Chapter 7 bankruptcy case.
What Is A Motion For Relief From Stay?
A motion for relief from stay basically is a proceeding that is started by a creditor to end the restraining order against them. It lets them continue whatever course of conduct they were pursuing prior to the filing of the Chapter 7 bankruptcy case.
If they were in the process of foreclosure of a home or repossession of a vehicle, your bankruptcy froze that process. The MFRS simply allows them to pick up where they left off.
If they were about to sell the house, and you filed a bankruptcy the day before the sale date, they can now continue forward with their sale (which has probably been continued from date to date until this relief order has been enteredso watch out since it may even be the day the Judge signs the relief of stay order).
How Do I Defend A Motion For Relief From Stay?
In Chapter 7 there are very few defenses to these motions. Most the defenses arise under Chapter 13 bankruptcy, which provides for other options. Nevertheless, there are some defenses you can invoke:
- Are they the proper party in interest? If this is real estate, do they possess the note?
- Did they follow Local and National Rules in providing all the appropriate authorities, declarations, and exhibits before the Court?
- Did they properly serve and notice all parties?
Finally, even once they get relief, dont forget that you also continue to have your state court remedies (foreclosure: real party in interest, etc.) to assert via state court proceedings to delay and/or stop the property recovery process.