What does it mean when a creditor files a motion to lift a stay under bankruptcy

Asked over 5 years ago - Detroit, MI

what does equity means on your home when you have a motion to lift a stay in banrupkty

Attorney answers (3)

  1. Lesley Abigail Hoenig

    Contributor Level 14

    Answered . Equity is the value above and beyond the loan amount attached to your property. If a creditor files a motion to lift the stay however, they do so because you are not current on the payments for the property (in this case your home), and in order for them to proceeding with foreclosing on the home, they must get the court to lift the stay first. The reason for this is that when you file bankruptcy a stay is put in place that prevents and creditors from taking action against you, and the trustee is put in charge of your assets. If there is any equity the trustee will administer the equity to pay creditors. If there is no equity, the property returns to you at the completion of the bankruptcy (you physically retain possession the whole time however). There is rarely equity in property when the stay is lifted.

  2. Margery Ellen Golant

    Pro

    Contributor Level 20

    Answered . Equity means the value of your home above the amount you owe on the mortgage. If your home was worth $250,000 and you owed the lender $200,000 your equity would be $50,000

    From your description, it seems that the motion to lift the stay means the creditor wants the bankruptcy court to lift the bankruptcy stay to give the creditor the ability to try to take the equity in your home away. If your home equity is not able to be claimed as exempt, then the house can be required to be sold and the equity after the mortgage lender is paid gets used to pay your creditors.

    If you are doing this bankruptcy by yourself, you need legal help. I don't t practice in your state and don't know your state's exemptions - it may be that you can claim the equity in the home as an exemption. If not, it may be that bankruptcy is not the best solution under the circumstances.

    I would urge you to consult a qualified bankruptcy attorney in your area. The National Association of Consumer Advocates (NACA) is a non-profit consumer advocacy organization. NACA maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. If you don't already have an attorney, please look there for someone in your area who specializes in consumer bankruptcy to review the details with you and advise you.

  3. Margery Ellen Golant

    Pro

    Contributor Level 20

    Answered . Equity means the value of your home above the amount you owe on the mortgage. If your home was worth $250,000 and you owed the lender $200,000 your equity would be $50,000

    From your description, it seems that the motion to lift the stay means the creditor wants the bankruptcy court to lift the bankruptcy stay to give the creditor the ability to try to take the equity in your home away. If your home equity is not able to be claimed as exempt, then the house can be required to be sold and the equity after the mortgage lender is paid gets used to pay your creditors.

    If you are doing this bankruptcy by yourself, you need legal help. I don't t practice in your state and don't know your state's exemptions - it may be that you can claim the equity in the home as an exemption. If not, it may be that bankruptcy is not the best solution under the circumstances.

    I would urge you to consult a qualified bankruptcy attorney in your area. The National Association of Consumer Advocates (NACA) is a non-profit consumer advocacy organization. NACA maintains a web site at www.naca.net where it lists geographically consumer law attorneys all over the US. If you don't already have an attorney, please look there for someone in your area who specializes in consumer bankruptcy to review the details with you and advise you.

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