Almost immediately after the Kentucky Bankruptcy Court receives your bankruptcy petition, it may enact an automatic stay that pauses your creditors’ collection activities against you. However, you must not underestimate the possibility of one or more of your creditors coming forward with a motion for relief from the stay. With this, the court may schedule a hearing so that you and the creditor may present your arguments for keeping or lifting it, respectively. So if you find yourself in this predicament, please follow along to find out how to effectively fight a motion to lift the automatic stay and how a proficient Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help build out your legal strategy for this. 

Why would a creditor want to petition to lift the automatic stay?

The obvious reason a creditor may petition to lift the automatic stay is to retrieve the payments they are still owed. But more specifically, they may argue in the Kentucky Bankruptcy Court that this order unfairly affects them and is otherwise unnecessary due to any of the following reasons:

  • The creditor may claim that the collateral is losing value, so they are not receiving adequate protection.
  • The creditor may claim that you filed for bankruptcy in bad faith, so that you may delay the foreclosure of your house or repossession of your vehicle.
  • The creditor may claim that they want to complete a legal action against you, since you are not making efforts to meet your required payments anyway.
  • The creditor may claim that you owe more than the asset is worth, so it does not need to be a part of your reorganization plan (i.e., for Chapter 13). 
  • The creditor may claim that the asset you want to protect is non-essential, so it does not need to be a part of your reorganization plan (i.e., for Chapter 13).

As a debtor, how can I fight a motion to lift the automatic stay?

As soon as you hear that a creditor has filed a motion to lift the automatic stay, you should file an objection to explain why it should remain in place. This may require you to present financial documentation and proposed payment plans. This is so you may explain how you are willing and able to address the debt and still act fairly toward the creditor. 

Even if the court sides with the creditor and your automatic stay gets removed entirely, you may still have an opportunity to make matters right. For example, you may have your lawyer facilitate a negotiation with the creditor on your behalf and attempt to secure an outside payment plan or settlement with them. This is so you can avoid harassing collection activities all the while. 

At Schwartz Bankruptcy Law Center, we treat every case with kid gloves, and you will notice this upon your initial phone call. So please do not hesitate to allow a talented Louisville, Kentucky consumer bankruptcy lawyer to represent you in your upcoming case.