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Motion to vacate the automatic stay

Elizabeth, NJ |

Hello, I filed bankruptcy my self on dec 2008, went to hearing on jan 2009. Everything appeared to be going well until I received this motion to vacate from my mortgage company. I did put the mortgage in the bankruptcy due to not being able to pay it. I will surrender it. I also received a court letter saying they had filed a motion to surrender same prior to motion to vacate. Should I be worry about this?

Attorney Answers 1

  1. A motion to lift stay is an application that a creditor brings in which the creditor asks the court to lift the protection of the bankruptcy proceeding.

    When you filed for bankruptcy, the automatic bankruptcy stay went into effect the minute your petition was filed. The stay prevented the mortgagee from doing anything further to collect its debt. Since the mortgagee has certain rights as a secured creditor to protect their mortgage interest, they can get the court to lift the stay if you have not filed a Chapter 13 plan to cure the arrears.

    You apparently filed a Chapter 7 proceeding, and it sounds like you were prepared to surrender your property in any event. Once the stay is lifted, the mortgagee has the right to continue its collection efforts BUT they are now limited to foreclosing on the property and taking it back. The mortgagee cannot sue you on the note or any pursue any deficiency. Your Chapter 7 proceeding eliminates your obligation to pay them any money.

    The motion to lift stay is ordinary and expected. You do not have to worry about it. You probably have a number of months left before you would have to leave the home, and you don't have to make any mortgage payments during this time.

    For more information about mortgage foreclosure defense, see the link below.

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