What is a Motion for Stay?

Answer 1

When a bankruptcy is filed, an automatic stay takes effect, prohibiting any creditor from taking or continuing any debt collection effort, including foreclosures.A creditor who believes the debtor cannot make current payments on secured debt, especially on a mortgage, which are payable when due after the date of filing, files a motion for relief from stay to be allowed to continue the foreclosure. The creditor is not excluded from the bankruptcy and remains subject to the court's jurisdiction regarding any sale/auction and disposition of proceeds, as well as for any deficiency after the sale or auction, which will be discharged.

Answer 2

Most Debtors always get notices in the mail 30 to 90 days after filing for Chapter 7 relief concerning property they own. In most cases, they have no idea what it is. Chances are, it's a Motion for Relief of Stay(MFRS). Usually your attorney explained this event and this notice should come as no surprise. But just in case, here you go:

A MFRS basically is a proceeding that is initiated by the creditor to end the restraining order against them. It's a proceeding to allow them to continue whatever course of conduct they were pursuing, but for the filing of the bankruptcy case. So 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 entered…so watch out since it may even be the day the Judge signs the relief of stay order).

In Chapter 7 there are very few defenses to the MFRS you just received. That is because the Bankruptcy Code provides very little. Most the defenses for a MFRS motion arise under Chapter 13. Nevertheless, there are some defenses you can invoke:

1) Are they the proper party in interest? If this is real estate, do they possess the note?

2) Did they follow Local and National Rules in providing all the appropriate authorities, declarations, and exhibits before the Court?

3) Did they properly serve and notice all parties?

Finally, even once they get relief, don't 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.

Answer 3

Do you mean motion for relief from stay? The automatic stay is placed into effect when someone / something (entity) files a bankruptcy petition. It is essentially an injunction preventing creditors from taking most actions to enforce their claims. A motion for relief from stay asks the court for permission to take action to enforce claims. It is most commonly filed to permit the creditor to enforce a lien / security interest.

Answer 4

Automatic stays occur under section 362(a) of the Federal Bankruptcy Code. Relief from the stay can be granted under Section 362(d). Usually it is secured creditors who want to foreclose on a piece of property and the stay keeps them from foreclosing.