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UH-Ohhhh: What is this Motion to Lift the Stay?

 

When a creditor has a lien on collateral he is called a secured creditor. If a secured creditor is being paid in a chapter 13 bankruptcy plan then, if he is not being treated properly, he can file a motion to lift the stay, which asks the bankruptcy judge to let the creditor have his collateral (which usually is your house or car).

The two things which usually cause a motion such as this to be filed would be the failure to make mortgage payments which were due after the date that the debtor filed bankruptcy and the failure to insure the collateral per the agreement with the creditor. Normally, the motion is filed for both reasons if the collateral is a house. However, because automobile loans usually must be paid in the payment plan, the only reason a motion is filed regarding automobile loans is for the failure to insure.

These motions must be responded to in writing according to the rules within a very specific timeframe from the date of

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    No, not unless you committed a crime in the creation of the debt (for example, fraud). Simply borrowing money and not being able to pay it back is not a crime. Many creditors representatives will tell you lies on the telephone and say that they will have you put in jail. Perhaps they are too ignorant to know they are wrong or that it is illegal for them even to say that. See More Bankruptcy Q&A