After you file, no one can take any action to collect your debt, enforce a judgment, garnish your wages, levy your bank accounts, take your property or continue with a lawsuit unless they go into federal bankruptcy court and lift the bankruptcy stay. There are some exceptions to this such as the requirement to keep paying child support.

Who lifts the bankruptcy stay?

A mortgage holder or automobile lender might want to lift the bankruptcy stay so they can take some action to pick up a car or foreclose on a mortgage. In order to lift the stay, a motion must first be filed in court and heard by a judge. With this process you need to respond to the motion to get the opportunity to convince the court that the creditor is wrongfully trying to take your property, or you aren’t really behind in your payments, or any other defense you may have to the motion to lift the stay.

Most often happens in a chapter 13 when payments are behind.

This most often happens in a Chapter 13 if you fall behind in your payments to a secured creditor. They want to repossess the automobile or foreclose on the home. If you have been making your payments it is hard for them to do anything. If you haven’t been making your payments they don’t want to wait three to five years for your chapter 13 case to be concluded.

What can you do?

• You may be able to get extra time to pay or you may be able to restructure your bankruptcy plan payments to catch up. If your requests are reasonable, and it appears that you can follow through, a judge will likely grant them.
• If you have received a motion to lift the bankruptcy stay, be sure and talk to your attorney about it. You have limited time to respond to the motion and ask for a hearing or the creditor will get what they ask for.
• You’ll want to examine your situation carefully and decide if a change in plan will work or if there really isn’t a workable option. Maybe you can’t afford to make the payments or keep the property.  It might be time to consider letting that property go.

L is also for:

• Lawyer, by Wisconsin Bankruptcy Lawyer, Bret Nason
• Lien by New York Bankruptcy Lawyer, Jay S. Fleischman
• Listing Assets and Debts in Bankruptcy Los Angeles Attorney, Mark J. Markus
• Long Term Payments,  Chapter 13 Plans by Philadelphia Suburban Lawyer, Chris Carr
• Luxuries by Colorado Springs Bankruptcy Attorney Bob Doig

Image credit: Leo Reynolds