A motion for relief is a creditor's way to ask the Bankruptcy court for permission to take back any property secured by a loan or lease.
In a Chapter 7 or Chapter 13 St. Louis bankruptcy, you are protected from creditors trying to take action to collect debts. This legal process is called the Bankruptcy Stay. If you are late with car or home payments, you are protected from foreclosure and repossession during the bankruptcy process.
However, If you want to keep a piece of property with a secured loan against it, then you must keep paying the loan or lease. A Chapter 13 bankruptcy will often help pay back arrears, or past due amounts. However, debtors must continue to make ongoing future payments for this property unless otherwise instructed.
If you don't make payments for property you are keeping, it's likely the creditor will file a motion for relief. Creditors can also file for relief if you fail to uphold other obligations under the contract, such as maintaining insurance coverage on the property.
A motion for relief from automatic stay is a legal request that a creditor can file with the court to get around the Bankruptcy Stay and begin collection attempts once again. Even though you have protection from creditors when your bankruptcy case is filed, a creditor still can request permission to get around this protection. The benefit of this motion to the creditor is that the creditor can take back the collateral (the house or the car) more quickly than just waiting for the bankruptcy to end.
After the creditor files the motion, your attorney has a chance to file a response with the court to explain how you intend to become current or explain how you have become current. The court usually hears the motion at a hearing approximately one month after the creditor files the motion. Unless you have proof that you have caught up on all the missing payments, the judge generally grants the motion on the hearing date, which allows the creditor to start the foreclosure, repossession, or eviction process.
If you can't become current with your payments before the hearing date, you might be able to enter into a "Stipulation Agreement" that allows you to pay the past due amounts over six months. However, sometimes creditor's won't agree to such an agreement. Stipulation agreements are usually only allowed in Chapter 13 bankruptcy cases as well. Stipulation agreements are not available in Saint Louis Chapter 7 case filings.
If you are in an active St. Louis bankruptcy case and have secured debts or ongoing lease payments, it is important to remain current on your payments. Falling behind can allow your creditor to pursue options to collect from you. Finally, if you continue to get behind on payments, you may want to consider surrendering the property through the bankruptcy to get a true fresh start.
Since 1997, the St. Louis attorneys at The Law Office of Tracy A. Brown, P.C., have helped hundreds in Saint Louis stop creditors from harassing, garnishing, and threatening clients through Chapter 7 and Chapter 13 bankruptcy filings that alleviate excessive debt. Contact us today to free your future from your past.