Motion for Relief from Automatic Stay
The motion the lender files to get bankruptcy court permission to proceed with foreclosure — how to oppose it effectively.
A Motion for Relief from the Automatic Stay is the motion a creditor files in bankruptcy court to obtain permission to proceed with a foreclosure (or other collection action) despite the automatic stay. When a bankruptcy petition is filed, the automatic stay (11 U.S.C. § 362) immediately prohibits ALL collection actions — including foreclosure. The creditor cannot proceed with the foreclosure without getting the stay 'lifted' (relief from the stay). The creditor files a Motion for Relief from Stay, typically arguing: (1) the debtor has no equity in the property and the property is not necessary for an effective reorganization (11 U.S.C. § 362(d)(2)), (2) the debtor is not making post-petition mortgage payments (if required by the plan or court order), or (3) cause exists (lack of adequate protection of the creditor's interest). Opposing the Motion for Relief is a critical juncture in bankruptcy — if the stay is lifted, the creditor can resume the foreclosure.
Purpose
- 1Obtain bankruptcy court permission to proceed with a foreclosure despite the automatic stay
- 2Demonstrate that the creditor's interest is not adequately protected (no equity, no post-petition payments, deteriorating property)
- 3Allow the creditor to resume foreclosure without violating the automatic stay (which would void the foreclosure)
Who Prepares It
The creditor's bankruptcy attorney prepares and files the Motion for Relief from Stay. Served on the debtor, debtor's attorney, and the Chapter 13 trustee.
When It Is Used
Filed when: the debtor has no equity in the property, the debtor is not making post-petition mortgage payments (post-petition arrears), the property is deteriorating (waste), or the debtor has filed multiple bankruptcies to delay foreclosure (serial filing). The motion is typically heard on shortened notice (14-21 days).
Legal Effect
If the motion is granted, the automatic stay is lifted as to the specific property and the specific creditor — the creditor can resume the foreclosure in state court (or non-judicial process). If the motion is denied, the stay remains in effect and the creditor cannot foreclose while the bankruptcy is pending. The debtor may negotiate an Adequate Protection Order: the debtor agrees to make ongoing monthly payments (and cure post-petition arrears over time) in exchange for the creditor's agreement to withdraw the motion or the court's denial without prejudice.
Common Mistakes
Homeowner Rights
Frequently Asked Questions
What is the automatic stay and how does it protect me?▼
The automatic stay (11 U.S.C. § 362) is the immediate injunction that takes effect the moment you file bankruptcy. It stops: foreclosure sales, foreclosure filings, collection calls and letters, evictions (in some cases, but the stay is limited for evictions), utility disconnections (for 20 days), repossession, and wage garnishment. It does NOT stop: criminal proceedings, child support proceedings, certain tax proceedings, or the obligation to make ongoing mortgage payments (in Chapter 13). The stay is the most powerful tool to stop an imminent foreclosure sale, but it's temporary — the creditor can seek relief.
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