Can I Sell Assets Before Filing for Bankruptcy?
While bankruptcy may have its fair share of negative consequences, you may still be drawn to file due to the benefit of the automatic stay. Essentially, this is the New York State Bankruptcy Court’s order to stop most creditors from pursuing collective activities against you. However, the operative word here is “most,” which is to say that this may not offer you the full financial relief you initially anticipated. With that being said, please read on to discover whether creditors possess the power to lift the automatic stay and how a seasoned Rockland County bankruptcy attorney at The Law Offices of Allen A. Kolber, Esq., P.C., can preserve your protections as much as possible.
Are creditors able to lift the automatic stay in my bankruptcy case?
Unfortunately, we must inform you that your creditors may be given the opportunity to file a motion for relief from the stay. In short, this is essentially a request to the New York State Bankruptcy Court to modify or altogether lift the automatic stay for your bankruptcy case.
With this, they must present a productive argument against you, proving that they are being unfairly prevented from protecting their own financial interests. More specifically, they may prepare any one of the following cases:
- Your creditor may claim that you have fallen behind on payments and exhibited no genuine effort to catch up.
- Your creditor may claim that you do not have an adequate amount of equity in the property you are fighting to maintain.
- Your creditor may claim that you cannot reasonably keep up with the ongoing obligations if you were to keep the property.
- Your creditor may claim that the property is not necessary for your financial reorganization plan (i.e., specifically for Chapter 13 bankruptcy).
What should I do if the bankruptcy court lifts the automatic stay?
After a motion to lift the automatic stay is filed, the New York State Bankruptcy Court may schedule a hearing where you and the petitioning creditor may present your arguments. In a worst-case scenario, the court may rule to lift it completely.
If this happens, your creditor may resume the collection activity that was previously paused. Namely, they may continue making collection calls, garnishing your wages, seizing your real property (i.e., foreclosing on your home or repossessing your vehicle), pursuing a lawsuit, etc.
The silver lining here, though, is that the court generally does not remove the entire automatic stay. That is, this order may only apply to the specific creditor who petitioned for it. This is to say that you may be afforded financial breathing room from your other outstanding creditors.
At The Law Offices of Allen A. Kolber, Esq., P.C., we treat every case with kid gloves, and you will notice this upon your initial phone call. So please do not hesitate to allow a competent Rockland County bankruptcy attorney to represent you in your upcoming case.
