The two most important parts of Chapter 13 or Chapter 7 bankruptcy from a debtor’s standpoint is the automatic stay and the discharge. The automatic stay is just what it sounds like. Its creation is automatic when a petition for bankruptcy protection is filed, and it stays or stops creditors from taking any steps towards collecting or enforcing a debt against a debtor. But what happens when a creditor feels that a debtor should not have the protections of the automatic stay when it comes to that person’s debts? Or even more importantly what steps can a debtor in bankruptcy take that could cause them to lose their automatic stay protections. Well, those are questions or issues that your Montgomery bankruptcy lawyers or Selma bankruptcy lawyers at The Sellers Law Firm are prepared to respond to or answer.
There are two most frequent kinds of creditors that attempt to lift a debtor’s stay, and their requests are usually caused by one of two things. The two most frequent kinds of creditors that may seek to lift a stay are secured creditors and landlords. Secured creditors are just what they sound like. These creditors hold a perfected lien in some property belonging to or in the possession of a bankruptcy petitioner. These creditors include mortgage holders for real property and lien holders on titled property such as cars and mobile homes. The second kinds of creditors that most frequently attempt to lift a debtor’s stay is a landlord of a residential rental unit.
These creditors usually ask for a motion to lift stay for one of two reasons. First, is the failure of a person to make post-petition payments that the debtor has agreed to make. In a Chapter 13 the debtor generally has agreed to make long term or lease payments on their car, home, or rental directly to the creditor. And for whatever reason the debtor fails to make these payments then the creditors can ask the Bankruptcy Court for an order allowing the creditor to foreclose on mortgaged property, repossess vehicles, or evict a tenant. The other reason Chapter 13, to fail to make adequate protection payments prior to a bankruptcy’s confirmation or regular monthly payments after confirmation. Since a Chapter 13 is geared toward the debtor making monthly payments to the trustee to be distributed to creditors the failure to make the payments to the trustee is the same as not paying the agreed to amounts to creditor under the Chapter 13 plan. If the trustee will not step up after someone has failed to make monthly payments, then the creditors can do so. For more information, call or text us now at 334-LAWYERS (529-9377). Our phone lines are answered 24 hours a day, and we can usually see you within 24 hours. We are here to help you, but you must contact us to get started!
Admittedly these motions are infrequently granted on an initial filing because the debtor will agree to catch up the payments and the creditor wants to be paid and not to have to deal with the property except in the case of landlord since they generally want to rent the property. If the parties agree then the Court will usually issue an order allowing the automatic stay to be lifted upon notice by the creditor that the petitioner has fallen behind in payments a second time.
While most of these discussions have dealt with Chapter 13 bankruptcy petitions there are times when motions to lift stay can come into play during a Chapter 7 bankruptcy petition. Motions to Lift Stay are infrequent in Chapter 7 because these bankruptcies only last 4 to 5 months and most creditors don’t want to spend the time, money or effort on a motion to lift stay when they know the process will be complete in a few months and that then the secured creditor could use the normal legal procedure to collect on the debt. The occasional Motions to Lift Stay are seen when debtors have stated in their petition that they plan on surrendering the property during the course of the bankruptcy, and the petitioner is not making any payments while the bankruptcy proceeds along its course. These are the kinds of arrangements and issues that your Montgomery bankruptcy lawyers and Selma bankruptcy lawyers at The Sellers Law Firm can assist their clients with during the course of a bankruptcy petition.
At The Sellers Law Firm, we can assist in fighting your creditors to make sure that you keep your home, car, and money! We have offices located in Montgomery, Selma, Greenville, and Troy, and consultations are always free. We can usually meet with you within 24 hours, and our phone liens are answered 24 hours a day! You can reach us by calling or texting 334-LAWYERS (334.529.9377). You may also email us at bsellers@sellerslawfirm.com or use the Contact Form on our website. Remember that doing nothing changes nothing so act now and contact us!