Prior to the 2005 bankruptcy code changes from Congress, relief from stay orders were a very common way for lenders to stop serial bankruptcy filers that were using bankruptcy to stop foreclosure. A relief from stay motion is a remedy that a lender seeks when a debtor or transferee of a debtor files for bankruptcy for the sole reason of using the automatic stay. A motion of relief from stay will render the automatic stay inapplicable in any future bankruptcy cases on that piece of property that is being foreclosed on. Instead of stopping the debtor from filing bankruptcy again in the future the motion directly addresses the use of the automatic stay by eliminating it when it comes to the lender's property in any future bankruptcy cases if there are any.
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Chapter 7 and Chapter 13 bankruptcy, without a question will stop foreclosure, at least temporarily. At the time of filing bankruptcy if the mortgage payments are behind and not caught up the mortgage company has the right to file a relief from the automatic stay and resume the foreclosure proceeding as before. A motion for relief from the automatic stay has the benefit of being expedited by the bankruptcy court under section 362 of the bankruptcy code. When a lender files a motion to remove this stay they should automatically get relief unless the court requires a hearing within 30 days. Sometimes the creditor will file a written waiver allowing the court to schedule a hearing in more than 30 days. Unless the lender files a waiver, the debtor must appear before the bankruptcy within 30 days and explain why the automatic stay should be preserved for them.
When filing for bankruptcy, creditors must stop all contact with you. Sometimes they might act innocently without knowing about your case and at that point you can make them stop. After that if the creditors continue on with the knowledge of your bankruptcy filing your lawyer can ask the bankruptcy court for actual and punitive damages as well as additional attorney's fees. It's very important to get the correct addresses of your creditors to your bankruptcy attorney so all the creditors can be given notice so you get the most out of the automatic stay. When the automatic stay is in place creditors are required to stop calling you and stop garnishing your wages if that is happening. The stay prohibits creditors from taking any actions against you. The only exceptions are for court fines and marital obligations like domestic support. Most of the time filing bankruptcy provides great relief. If your creditors keep on calling you, call your bankruptcy attorney right away so the bankruptcy court can be contacted to get all this stopped.
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