Motion for Relief
Motions for Relief are the creditors way of petitioning the court to remove the bankruptcy protection and allow them to take action against your property. When a motion for relief it generally due to two factors. The first and most common is delinquency on payments while the second, less frequent, factor is failure to adequately protect the creditors’ interest in the property. Generally Motions for Relief are for one of these reasons or the other, but they may also contain elements of both.
A Motion for Relief filed due to non-payment is most often resolved through an Agreed Order that allows for the Debtor to place the arrears in the plan or pay the arrears back over a six month period in six equal payments. Failure to maintain payments after the Agreed Order has been entered into results in the creditor issuing a Notice of Default. The default must be cured within 10 days from the date the default was issued. If the default is not cured in the given time period then the automatic stay lifts and the creditor is free to impose it’s lien against the property. It’s important to note that Agreed Orders specify the number of defaults that an individual will be allowed. Once the given number of defaults exceed what was allowed by the Agreed Order, the automatic stay will lift.
Motions for Relief resulting from failure to adequately protect a creditor’s interest are mostly resolved by addressing the particular issue that the creditor is raising. The most common reason cited when addressing adequate protect situations is proof of insurance. Other issue that can be raised regarding adequate protection is Adequate Protection Disbursements (APD). These can be resolved by an Agreed Order incorporated at confirmation but are most likely going to be resolved with a simple letter agreement and an amended plan.
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