What Is A Relief From Stay And Abandonment

Full question:

What is a relief from Stay and Abandonment?

Category: Bankruptcy
Date: 04/07/2025
State: Louisiana

Answer:

Generally, it means that the creditor is seeking to pursue collection action on the debt, despite the bankruptcy filing and decision of abandonment. For example, a bank may file for relief from stay to pursue a foreclosure.

The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. An automatic stay in bankruptcy proceedings immediately stops any lawsuit filed against the debtor and virtually all actions against their property by a creditor, collection agency or government entity. The automatic stay may be a reason for persons to file bankruptcy when they are being evicted or foreclosed on, being found in contempt for failure to pay child support or losing such utility services, welfare or unemployment benefits, their driver's license or job, etc.

Abandonment is also used in bankruptcy law to define what property constitutes the estate of the debtor to be administered by the trustee. Property of the estate may be abandoned at the instigation of the trustee if it is of inconsequential value and benefit to the estate. This method of abandonment has been referred to as "proposed abandonment." Property of the estate may be abandoned pursuant to a request by a party in interest for an order of the Bankruptcy Court directing the trustee to abandon property when such property is burdensome to the estate or that is of inconsequential value and benefit to the estate. This method of abandonment has been referred to as "compelled abandonment." Also, all scheduled property which remains unadministered upon closing of the case is deemed abandoned from the estate and regarded as administered for purposes of closing and reopening the case. This final method of abandonment has been referred to as "deemed abandonment."

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

What does motion from relief of stay mean?

A motion for relief from stay is a formal request made by a creditor to the bankruptcy court. The creditor seeks permission to continue collection actions, such as foreclosures or repossessions, that are typically halted by the automatic stay triggered when a bankruptcy case is filed. If granted, this allows the creditor to proceed with their actions against the debtor's property.

What happens if I get money after filing Chapter 7?

If you receive money after filing for Chapter 7 bankruptcy, it may be considered part of your bankruptcy estate. This means the bankruptcy trustee could use those funds to pay your creditors. However, if the money is exempt under state law, you may be able to keep it. It's important to report any new income or assets to your attorney and the trustee.

What happens when an order of relief is granted?

When an order of relief is granted, it allows the creditor to proceed with collection actions that were previously halted by the automatic stay. This means the creditor can take steps such as foreclosing on a property or repossessing collateral. The debtor is notified, and the court's decision is based on the creditor's demonstrated need to act.

What does motion for relief granted mean?

A motion for relief granted means that the court has approved a creditor's request to lift the automatic stay in a bankruptcy case. This allows the creditor to resume collection efforts, such as foreclosure or eviction, against the debtor's property. The court typically grants this motion if it finds that the creditor has a valid reason to proceed.

How to respond to motion for relief from automatic stay?

To respond to a motion for relief from automatic stay, you should file a written objection with the bankruptcy court. In your objection, explain why the stay should remain in place, such as showing that you have a valid defense against the creditor's claims. It's advisable to consult with a bankruptcy attorney to ensure your response is properly crafted and submitted.

What is the purpose of an order for relief?

The purpose of an order for relief is to formally grant a debtor protection under bankruptcy laws. It initiates the bankruptcy process, triggering the automatic stay that halts most collection actions by creditors. This order allows the debtor to reorganize their finances or liquidate assets to pay creditors, depending on the type of bankruptcy filed.