Revoking the Automatic Stay - Total Bankruptcy
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Revoking the Automatic Stay

The automatic stay serves as a sort of Swiss Army knife for debtors in bankruptcy protection. It may stop collection lawsuits, prevent foreclosure on homes and silence aggressive creditors.

Due to the benefits of this feature, some people in bankruptcy fear that creditors may try to revoke the automatic stay. While this sometimes occurs, revoking the automatic stay requires court permission and a lot of legal legwork from a creditor.

As a result, automatic stay removals are relatively uncommon. The steps a creditor has to take to revoke an automatic stay are listed below.

How the Automatic Stay May be Revoked

Again, the automatic stay may be revoked in certain circumstances in Chapter 7 or Chapter 13 bankruptcy, but it certainly isn't easy. In order to lift the automatic stay, a creditor must usually:

  • Convince the court that the debtor has stopped making payments or is otherwise failing to follow the Chapter 13 plan.
  • File a motion for relief from the automatic stay.
  • Hope that the bankruptcy judge will grant the relief.

Of course, even if the bankruptcy judge lifts the automatic stay for one creditor, the stay may still provide protection against other creditors' claims. And, once the stay is lifted, the debtor may still be able to fight the creditor's action in other respects.

Preserving Your Automatic Stay

While creditors' revoking of your automatic stay is sometimes possible, there are active steps you can take to reduce the odds of this occurrence.

Ways to prevent the revocation of an automatic stay in a Chapter 13 bankruptcy include:

  • Making your Chapter 13 payments regularly
  • Following the terms of your Chapter 13 plan
  • Being honest with the bankruptcy judge about your debts and assets

Remember, the automatic stay is intended to protect people in debt from creditors while their bankruptcy is proceeding. This gives filers some breathing room while they attempt to sort out their debt issues.

Since the automatic stay is such an integral part of the bankruptcy process, bankruptcy judges are usually reluctant to revoke it to appease creditors.

Thus, if you abide by the terms of your plan and work honestly with the court, you’ll improve your chances of successfully fighting off an attempted automatic stay revocation.

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