Relief from Stay in bankruptcy is an important subject. When a debtor files for bankruptcy, an automatic stay goes into effect prohibiting creditors from taking any action of any kind to collect a debt. It stops all lawsuits including foreclosures and evictions. It’s against federal law for a creditor to violate the stay. However, creditors have the right to ask the bankruptcy court to lift the stay, which is done by the filing of a Motion for Relief from Stay. Once the motion is filed, the debtor has the right to defend the motion. If the stay is lifted, the creditor may then proceed with its collection efforts, typically completing its foreclosure action.
The local rule in Southern District of Florida amendments include the following amendments:
The automatic stay generally applies only to actions against a debtor. However, in chapter 12 and 13 cases, the stay also applies to non-debtors who are also liable on a consumer debt of a debtor, such as a joint credit card, or a car loan co-signed by a debtor’s relative. It is not limited to spouses of a debtor. It applies to any person who is jointly responsible for a debt. Creditors seeking relief to continue their collection efforts against a co-debtor must seek relief under §1201(c) or §1301(c).
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