Understanding the Motion for Relief from Stay and Abandonment (Bankruptcy)
Definition & Meaning
A motion for relief from stay and abandonment is a formal request filed in bankruptcy court. This motion seeks to either modify, condition, or completely lift the automatic stay that is imposed under Section 362 of the Bankruptcy Code. The automatic stay temporarily halts actions by creditors to collect debts, allowing the debtor to reorganize their finances. Additionally, the motion may request the abandonment of certain property under Section 554, which allows a bankruptcy trustee to relinquish their interest in property that is burdensome or of little value to the estate.
Legal Use & context
This motion is primarily used in bankruptcy proceedings, particularly in Chapter 7 cases. It allows secured creditors to regain access to their collateral when the debtor is unable to maintain payments. Users can manage this process by utilizing legal templates available through US Legal Forms, which can help streamline the filing of the motion and ensure compliance with court requirements.
Real-world examples
Here are a couple of examples of abatement:
Example 1: A creditor files a motion for relief from stay to repossess a vehicle after the debtor fails to make payments. The court holds a hearing and grants the motion, allowing the creditor to reclaim the vehicle.
Example 2: A bankruptcy trustee files a motion to abandon a rental property that is losing money and has no equity, determining it is not beneficial to the estate. (hypothetical example)
Relevant laws & statutes
The primary statutes governing motions for relief from stay and abandonment are:
- 11 U.S.C. § 362 - Automatic Stay
- 11 U.S.C. § 554 - Abandonment of Property