Generally, Motion for Relief hearings in Chapter 7 cases are not litigated matters.   When you file your Chapter 7 case, an automatic stay goes into effect immediately, resulting (with very few exceptions) in the immediate cessation of any creditor action.   In most cases, the stay will stop a pending repossession, foreclosure, eviction or other action.

When We Do Not Oppose a Motion for Relief from Stay

In some cases, however, you may not have any objection to a creditor continuing with its efforts to recover property.  For example, if you have made the decision to surrender a vehicle or a home in your Chapter 7, there is no reason to keep the creditor from taking otherwise permitted actions under Georgia state law to take possession of its property.

In such a circumstance, the creditor will file a Motion for Relief from Stay asking the bankruptcy judge to lift the stay for the limited purpose of permitting the creditor to take possession of surrendered collateral.   If you have filed a “Statement of Intention” in your Chapter 7 pleadings that provides for surrender of collateral, the motion for relief from stay that your creditor will file is basically a formality.  A “consent order” on a Chapter 7 motion to lift stay specifically provides that the creditor cannot come after you for a deficiency claim or harass you for the unpaid portion of its claim.

In cases where there is no basis to oppose relief, I will recommend that we not oppose the creditor’s motion and agree to a consent order lifting the stay.  This consent process saves both of us an unnecessary trip to the courthouse.

Contested Motions for Relief from Stay

Creditors will also file Motions for Relief in Chapter 7 cases if you have possession of collateral (usually a car or a house) and you are not current with your payments and/or you have not stated your intent in your Chapter 7 pleadings.  Unlike Chapter 13, where there is a three to five year payment term, there is no extended payout option in a Chapter 7.   If you are not current or if your insurance lapses and your creditor files a motion, there are very few arguments to present to the judge that will stop the judge from granting the creditor’s motion.

If you want to keep your house or car or any other secured property, make sure that you understand your obligations to keep the payments current and to keep the collateral insured before you file.  While you can convert to a Chapter 13, you are much better off making an informed decision about secured debt prior to filing.


Jonathan Ginsberg represents honest, hardworking men and women in the Atlanta area who need bankruptcy protection. Call him at 770-393-4985 for a confidential discussion.

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