What is a Motion for Relief from Stay in a Florida Bankruptcy Case
Many times, creditors file motions for relief from stay in chapter 7 and chapter 13 bankruptcy cases. What they are essentially asking for is permission from the bankruptcy court to move forward with state court remedies to foreclose on property. Therefore, secured lenders are the creditors permitted to do this. Homeowners Associations are even allowed to file the motion because when the debtor signed to purchase the home, the covenants and restrictions of the homeowner's association permit the association to foreclose if payment assessments are not paid on time.
Creditors are not entitled to this type of relief if the debtor is current on the payments, the chapter 13 plan provides for payment to the creditor, or if the property has equity. Many times, the bankruptcy court will makde the debtor show proof that the collateral is properly insured or it can grant the creditor adequate protection payments in the interim until discharge or the 13 plan is confirmed.
Adequate protection payments usually involve the debtor making the same payments to the creditor had the bankruptcy not been filed. If the creditor receives relief from the automatic stay, the creditor can look to record liens on the property or foreclose on the collateral if the payments are not current. Many times, this may be a non-issue especially if the debtor is looking to surrender the collateral anyway.
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Greg Gilbert
Keith Maynard
