Understanding the Motion to Terminate Stay as to Co-Debtor in Bankruptcy Law

Q: How long does a motion to terminate stay take?

The timeline can vary, but a hearing is typically scheduled within a few weeks after the motion is filed.

Q: Can I object to a motion to terminate stay?

Yes, both the debtor and co-debtor can file a written objection to the motion within the specified timeframe.

Definition & Meaning

A motion to terminate stay as to co-debtor is a legal request made by a creditor to lift the automatic stay that protects a co-debtor from collection actions related to a shared debt. This motion is typically filed in a bankruptcy case, specifically under Chapter 13, where the debtor has proposed a repayment plan. The creditor must demonstrate that certain conditions are met to justify lifting the stay, allowing them to pursue collection against the co-debtor.

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Legal Use & context

This term is primarily used in bankruptcy law, particularly in Chapter 13 cases. It involves creditors seeking relief from the stay that prevents them from collecting debts from individuals who are jointly liable with the debtor. The motion can be filed by any creditor who has a claim against the co-debtor, and it is crucial in situations where the creditor believes they will suffer harm if the stay continues.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

For instance, if a debtor and a co-debtor took out a loan for a car, and the debtor's Chapter 13 plan proposes to pay only 70 percent of the loan, the creditor can file a motion to terminate the stay. This allows them to pursue collection from the co-debtor for the remaining balance. (Hypothetical example)

Relevant laws & statutes

The relevant statute governing this motion is Title 11 of the U.S. Code, specifically 11 U.S.C. § 1301, which outlines the stay of action against co-debtors and the conditions under which a creditor can seek relief from that stay.

Comparison with related terms

Term	Definition	Key Differences
Motion for Relief from Stay	A request to lift the automatic stay in bankruptcy.	Applies to all debtors, not just co-debtors.
Co-debtor Stay	A protection preventing creditors from collecting from co-debtors.	Specifically relates to individuals jointly liable for a debt.

Common misunderstandings

What to do if this term applies to you

If you are a creditor considering filing a motion to terminate the stay as to a co-debtor, gather all relevant documentation regarding the debt and the Chapter 13 plan. You may want to consult with a legal professional to ensure your motion is properly filed. Users can also explore US Legal Forms for templates that can assist in drafting the necessary legal documents.

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Quick facts

Typical filing fee: Varies by jurisdiction.
Jurisdiction: Federal bankruptcy court.
Possible outcomes: Stay lifted, modified, or denied.

Key takeaways

Frequently asked questions

What is a co-debtor stay?

A co-debtor stay is a legal protection that prevents creditors from collecting debts from individuals who are jointly liable with the debtor during bankruptcy proceedings.