If a creditor desires to seek further relief after a bankruptcy is filed, they may file a Motion for Relief from Stay requesting the court to either remove or modify the bankruptcy stay. Relief from the automatic stay may be granted in the event a creditor is deemed to not be adequately protected during the term of the bankruptcy.
Creditors may obtain an court order ending the stay and allowing them to foreclose on a mortgage or enforce other liens. If adequate protection is given the item, the creditor normally will not be granted the relief from stay.
A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. If the judge lifts the stay, the creditor may take whatever action the court permits.
In certain situations, a creditor may obtain an Order for Relief from Stay to allow them to enforce their claims, pursue collections on a co-debtor, or any other activity that would otherwise violate the automatic stay. When an order for relief of stay is granted by the court, the automatic stay is canceled.
A request by a creditor with an order from the Bankruptcy Judge to permit the creditor to enforce its claims and pursue collection activity. A motion for relief from automatic stay is generally filed by a mortgage company when post-petition payments have not been made, by the IRS or other taxing authority seeking a setoff, or by any secured creditor when the creditor is not receiving sufficient payment through the Trustee’s office on pre-petition debts or obligations.
A creditor can ask the judge to lift the automatic stay and permit some action against the debtor or the property of the estate. If the motion is granted, the moving party (but no one else) is free to take whatever action the court permits. Relief can be absolute, for example, permitting the creditor to foreclose on property, or limited, as for example, allowing the recordation of a notice of default.