Can a Creditor Have the Automatic Stay Lifted in My Bankruptcy Case?
For any individual or business filing for bankruptcy, the automatic stay is an extraordinary tool that they can expect to take effect at the time of filing the bankruptcy petition. In general, debtors can expect the automatic to protect them as soon as they file for bankruptcy. Yet there are some limited circumstances in which a creditor can have the automatic stay lifted. This is not something a debtor should expect, but it is something a debtor should be aware of and should discuss with a bankruptcy lawyer in West Palm Beach if they have any concerns. In the meantime, we can provide you with more information about how and when a creditor can have the automatic stay lifted in a bankruptcy case.
What is the Automatic Stay?
In order to understand how and why and when the automatic stay might be lifted, it is essential to have a clear understanding of the automatic stay and the types of protections it provides to debtors who have filed for bankruptcy.
The automatic stay is an injunction that stops any creditor or debt collector from moving forward with an existing lawsuit or any existing actions designed to collect debt, and it also stops creditors and debt collectors from initiating any new actions to collect debt, such as a lawsuit filing or a wage garnishment action. The automatic stay also stops foreclosure proceedings that are in process and prevents mortgage servicers from initiating any foreclosure actions.
How and When Can the Automatic Stay Be Lifted?
The only way the automatic stay can be lifted — and it will not be lifted wholesale, but rather for a specific creditor or creditors — is for a creditor to file a motion to have the automatic stay lifted for them. Even when a creditor files a motion to lift the automatic stay, it is certainly not a given that the court will lift the automatic stay.
When a creditor does file a motion, you can work with your bankruptcy lawyer to oppose the motion. In order to oppose the motion, you will file a response and serve the response on the creditor. You should also know that the creditor has the burden of proving that there is a valid reason that the court should lift the automatic stay. Usually, the creditor will need to show that the creditor will be harmed financially — to such a degree that outweighs the debtor’s protection from the automatic stay — if the bankruptcy court does not lift the automatic stay to sell a particular piece of secured property, for example/
Typically, a lifting of the automatic stay will only be approved in cases involving secured creditors (and it is usually only secured creditors that file motions to lift the automatic stay). The most common example is a case involving a mortgage servicer seeking to have the automatic stay lifted in order to sell a home that is in foreclosure.
Contact a West Palm Beach Bankruptcy Lawyer Today
Whether you have questions about your rights after you file for bankruptcy, or you have specific concerns about the automatic stay, one of the experienced West Palm Beach bankruptcy attorneys at Kelley, Kaplan & Eller can help. We can speak with you today about what to expect in your bankruptcy case, and we can represent you when you are ready to file your bankruptcy petition.
