Motion to Lift Stay Hearing
When a Debtor falls behind on the house payment or car payment, the creditor will file a Motion to Lift the Automatic Stay. This is usually done when the Debtor is behind 45-60 days. The motion allows the Debtor (through the attorney) to file a response to the motion and attend a hearing.
Most Motions to Lift the Automatic Stay are resolved before the hearing, but there are a few that remain unresolved at hearing. This is usually because the creditor is unwilling to work out an arrangement for the Debtor to get current or there is a dispute as to how many payments the Debtor is behind.
The hearing is a preliminary hearing where no live testimony is allowed. The Judge is only allowed to consider evidence presented to the court through affidavits. This means both the Creditor and the Debtor must file affidavits with the court if they want to avoid a default judgment. Even if the Debtor agrees he is behind, an affidavit still must be filed. If there is conflicting information in the affidavits, the judge will order the hearing to be passed to a final hearing.
The final hearing is where the Judge hears live testimony and makes a final determination. Usually the Creditor and Debtor will need to attend to testify. The Judge does not only determine if the Debtor is behind, but if he will be able to get current and make his payments from that point on. Also, the Debtor must show the property is question is necessary for a successful reorganization if it is a Chapter 13. This means it must be his homestead if it is a house or it must be his only car. The Creditor must show he will suffer irreparable harm if the stay is not lifted. Usually this means that the Debtor has no means to get current and there is no equity in the property or the property is not insured.
Please fill out our free evaluation form to determine if bankruptcy is right for you.
