Anyone who is facing immense debt has the option to file for bankruptcy. Most will have the option of choosing between Chapter 7 or Chapter 13 bankruptcy. Chapter 7 bankruptcy will allow them to discharge a large number of their debts. Chapter 13 bankruptcy requires that the debtor develop a monthly repayment plan. Whichever option is chosen, the debtor will be issued an automatic stay order.

What is a Motion for Lift of Automatic Stay?

The automatic stay order works to prevent any creditors from taking actions to collect on a debt without the permission of the bankruptcy court judge. This order will apply to all creditors and is not a permanent order. The intent is to provide the debtor with the opportunity to pay their debts free of harassment, but it is possible for creditors to seek a lift of the automatic stay.

When a creditor still wants to seek money that is owed to them during a stay, they can file a motion with the court to life the automatic stay. When a creditor seeks to lift the stay, the debtor is notified of their intent and entitled to a hearing. The creditor must prove to the court that there is a reason greater than the debtor's bankruptcy protection to lift the stay on their account.

A court may choose to lift the stay when:

• A debtor is not making payments on secured debts
• The creditor is not protected in their property
• Unsecured debt is excluded from the discharge

Once the creditor files the motion, the debtor's attorney can oppose the motion if it will make a significant difference in the bankruptcy filing. In some instances, nothing will be gained from this opposition. Evidence will be heard from either side and the court will determine if the creditor's reason for lifting the stay is legitimate.

Working with a bankruptcy attorney can help anyone decide what is best in their filing. In some instances, it may be worthwhile to fight the motion, but in others, it would not make much of a difference. The unique nature of each situation is the best guide.