The main reason why a Chapter 7 bankruptcy filing may seem so appealing to you is the automatic stay factor. Namely, an automatic stay is a court order that stops most creditor collections against you. However, you must understand that this is not a guaranteed privilege granted to you. Rather, the New York State bankruptcy court holds the authority to lift or remove an automatic stay at any time. That said, please follow along to find out when the court might lift an automatic stay and how a proficient Rockland County Chapter 7 bankruptcy attorney, at The Law Offices of Allen A. Kolber, Esq., can fight to ensure it remains in place.
Under what circumstances will a bankruptcy court lift an automatic stay?
Your automatic stay being lifted may not necessarily negatively affect or hurt you. That is, this is typically terminated towards the end of your Chapter 7 bankruptcy case when your eligible debts are discharged. This is because, being that these debts are no longer in your immediate financial responsibility, creditors, in turn, cannot pursue you for collections.
However, you must prepare yourself for the high possibility that your creditor(s) may file a motion with the New York State bankruptcy court to lift your automatic stay. Here, their argument may be that they require relief. The cause for relief may be any of the following:
- Your creditor may argue that their collateral is not adequately protected:
- Your home is not insured and may incur damage while the stay is in effect.
- Your car payments are late, and its value may depreciate while the stay is in effect.
- Your creditor may argue that their collateral is worth less than the outstanding debt:
- Your home has no equity, and they wish to start foreclosure procedures.
- Your car has no equity, and they wish to repossess it.
- Your creditor may be your landlord and claim they must continue or commence an eviction proceeding against you.
- Your creditor may argue that you are manipulating the bankruptcy system by filing multiple times in a short period.
- Your creditor may argue that continuing their pending collection activities may positively influence your bankruptcy case.
Can an automatic stay be lifted in my Chapter 13 bankruptcy case?
Yes, the court may rule to lift the automatic stay from your Chapter 13 bankruptcy case, as well. But your creditor(s) may have to give different reasons for filing this motion. For one, they may claim that your property is irrelevant to your debt restructuring plan. Here, they must prove that you do not directly own said property.
Or, an arguably more effective argument may be that you have consistently failed to meet the required payments (i.e., mortgage and car payments) in your three- to five-year repayment plan. And so, they may wish to collect the collateral (i.e., home and car) for the sake of their immediate relief.
If you find yourself up against this, please do not go through it alone. Instead, pick up the phone and speak with a talented Rockland County Chapter 7 bankruptcy attorney. Our team at The Law Offices of Allen A. Kolber, Esq. wishes to aid you during this difficult point in time.
