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Courts and procedure
Relief from stay
Relief from stay is permission from the bankruptcy court for a creditor to take action against the debtor or the debtor's property that the automatic stay would otherwise prohibit. The creditor asks through a motion for relief from stay, often called a motion to lift the automatic stay. 1
Talk to a lawyerHow it works
A creditor cannot decide for itself that the stay no longer applies. A party in interest asks the court, and the court acts after notice and a hearing. Relief can mean ending the stay, annulling it, modifying it or putting conditions on it. 2
The court grants relief for cause, which includes a lack of adequate protection of the creditor's interest in property. For an act against property, it also grants relief if the debtor has no equity in the property and the property is not necessary to an effective reorganization. 2
At the hearing, the party asking for relief has the burden of proof on whether the debtor has equity in the property. The party opposing relief has the burden of proof on all other issues. 2
The clock is short. In an individual's case, the stay ends 60 days after the request unless the court makes a final decision within those 60 days, or the period is extended by agreement of all parties in interest or by the court for good cause. Even when relief is granted, the order is on hold for 14 days after it is entered unless the court orders otherwise. 2
Common questions
Can a creditor act as soon as it files the motion?
No. Relief comes from the court, after notice and a hearing. The stay can end without a ruling, though, if 60 days pass in an individual's case and the period has not been extended. 2
Who has to prove what at the hearing?
The creditor asking for relief must prove the point about the debtor's equity in the property. The party opposing relief carries the burden on every other issue. 2
What should I do if I receive a motion for relief from stay?
Check the notice for the response deadline and hearing date, which depend on the rules and your court. The federal courts strongly recommend advice from a qualified attorney. 3
Can I dismiss my case and file again after a creditor asks for relief?
An individual cannot file under any chapter for 180 days if an earlier case was voluntarily dismissed after creditors sought relief from the bankruptcy court to recover property on which they hold liens. 4
Sources
Received a motion for relief from stay?
A bankruptcy lawyer in your state can look at the motion and the deadlines with you.
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