The automatic stay is a protective mechanism that protects a bankruptcy debtor from creditors. Creditors are prohibited from pursuing collection activities against a debtor unless they have permission from the bankruptcy court to do so. It is in effect for the duration of a bankruptcy case. It goes into effect when the bankruptcy petition is filed, and remains in effect until the court closes the case.
Must First Notify The Debtor
In order to lift the automatic stay, a creditor must show that it will be successful in pursuing collection efforts against the debtor. The creditor must prove that it will be successful in the trial and that it will not affect the rights of other creditors. The court must consider this when deciding whether to lift the stay.
Once a creditor files a motion to lift the stay, it must first notify the debtor. The debtor has 14 days to respond to the notice. If the debtor does not respond within this timeframe, the court will grant the motion by default. However, if the debtor is planning to give up collateral, he may not respond.
If the automatic stay is lifted, the creditor may seek damages in the amount of attorneys’ fees to stop the stay. The creditor may also be entitled to punitive damages. The creditor must file a motion with the bankruptcy court in order to resume litigation, and the bankruptcy court must grant permission before lifting the stay. Check this out – scura.com…