You may know that if your customer files for bankruptcy, an automatic stay is enforced, preventing any form of collection activity. But did you know that a relief from automatic stay can allow collection efforts to resume? Though the automatic stay is indeed automatic, there are a number of reasons that a creditor may be able to obtain relief from stay. Bernstein-Burkley attorneys regularly work with clients to determine if they qualify, and to help them navigate this complicated process in Bankruptcy Court.
Whether a chapter 7 bankruptcy debtor chooses to redeem, reaffirm or surrender their secured assets, Bernstein-Burkley’s bankruptcy and restructuring team will work to determine if a relief from stay is possible. If they choose to surrender, we will seek the consent of debtor’s counsel and the trustee in order to file a consent motion for relief from stay. If it is redeem, we will follow-up on payment and file for relief from stay if debtor will not or cannot actually redeem the asset. If it is reaffirm, we will follow-up with debtor’s counsel to see if reaffirmation is actually viable and then move quickly to file relief from stay.
In chapter 11, 12 and 13 bankruptcies, debtors are required to propose a plan that includes payments for the amount overdue on secured assets, and must make these payments regularly. If these payments are not made, we will work to obtain relief from stay for our clients. Other irregularities such as not having insurance on the asset are cause for us to obtain relief from stay for our clients.
Finally, the automatic stay is not limited to collection activities for secured assets. It also includes a stay on activities such as lawsuits or actions to collect on insurance. If our clients need to continue a lawsuit for a specific purpose that is not contrary to the bankruptcy code or collect on insurance proceeds, we will aggressively pursue a relief from stay.
If you have any questions regarding Bernstein-Burkley’s Bankruptcy & Restructuring services, please contact us at 412-456-8100.