Creditors Have a Way Around Things
Even though the automatic stay kicks in as soon as you file for bankruptcy, it is common for some creditors to apply for relief from the stay. Often applications for relief from stay are made immediately after the petition is filed, but they could arise at any time during the case. If the court grants relief, a creditor may continue efforts to collect on any unpaid debt which may cause problems for the debtor.
At Lanigan and Lanigan, P.L., we will continue to work with you throughout your case and make sure you are treated fairly when creditors attempt to collect from you. If you have filed bankruptcy and are having problems with creditors, contact bankruptcy attorney Roddy Lanigan in Winter Park, Florida. At Lanigan and Lanigan, we will make sure that throughout the bankruptcy process you understand the procedures and are treated with respect.
Four Forms of Relief
As such, section 362(d) sets out four different forms of relief from the automatic stay: termination, annulment, modification, or conditioning. This allows the court to provide the most appropriate form of relief under the circumstances of the case.
Termination of the stay lifts it completely and allows the creditor to commence or resume the suspended activity. However, termination ends the stay only after the court grants the relief, so it does not validate prior violations of the stay.
Annulment terminates the stay retroactively which means the stay is treated as if it was never in effect. This means that prior acts that would have been deemed a violation of the stay are allowed and become valid. This form of relief for the creditor is regarded as an extraordinary remedy and is generally only granted when the debtor has abused the system.
On the other hand, the court may grant a modification of the stay which permits some activity to be continued but not allow the creditor full rights to enforce the claim. The court may allow a creditor to continue with litigation up to the point of judgment but not allow the creditor to enforce the judgment until after the bankruptcy case is closed.
Finally, sometimes a court can condition the stay which leaves it in effect upon the debtor or trustee satisfying a certain condition. The grounds for relief from stay can be complicated so creditors may attempt to use them after you have filed for bankruptcy. If you have any questions regarding creditors and the automatic stay, contact Lanigan and Langian in Winter Park. We will make sure your rights are always protected.