3 Easy Steps Towards Credit RepairWhen do secured creditors try to remove the stay in order to foreclose on your house?
Secured creditors are likely to ask the court to remove the stay if you are not making payments or the collateral is not adequately protected. (To learn more about secured debts, see What Is a Secured Debt?)
Not making payments on a secured debt. Secured creditors often file motions to lift the stay when the debtor is not making payments. Since property used as collateral must be paid for or returned during bankruptcy, the court will normally lift the stay unless the debtor can bring the payments current or show another good reason to deny the motion (for example, the debtor will use one of the available methods for dealing with secured debts in Chapter 7 bankruptcy, or the debtor has provided for payment of the debt in a Chapter 13 repayment plan). For example, if you are behind on your mortgage when you file for Chapter 7 bankruptcy, your mortgage lender is likely to ask the court to lift the stay so it can continue with foreclosure.
(To learn more about secured debts in Chapter 7, see Secured Debt & Property in Chapter 7 Bankruptcy. For more on the repayment plan, see The Chapter 13 Repayment Plan.)
Lack of adequate protection. A secured creditor may also complain that it is not adequately protected. Lack of adequate protection usually means that there is no insurance on the collateral, or it is likely that the debtor will not make future payments.
A creditor must also prove to the court that it has standing. In these cases standing usually boils down to showing that the debtor is actually indebted to the creditor seeking the relief. During the recent mortgage crisis, standing has been a sore subject for the banking industry. Some banks have been unable to prove standing as a subsequent creditor on mortgages that were transferred several times and the original notes are now lost.
Motions by Unsecured Creditors
Sometimes unsecured creditors and other parties seek to lift the automatic stay. The court will often grant the request if the unsecured debt will be excluded from the bankruptcy discharge, like child support obligations, spousal support, or criminal restitution. This is especially true when the debtor has filed a Chapter 7 bankruptcy case. Chapter 13 debtors are often able to repay these non-dischargeable debts over three to five years and remain under the protection of the bankruptcy court.
A landlord may seek relief in order to evict for non-payment of rent. A bankruptcy debtor’s rent obligation is divided on the bankruptcy filing date into pre-bankruptcy and post-bankruptcy debts. Pre-bankruptcy rents are dischargeable, and post-bankruptcy rents are not dischargeable and not subject to the automatic stay. This means that while the automatic stay would prohibit the landlord from collecting on unpaid pre-bankruptcy rent, the landlord may evict if post-bankruptcy rents are not paid.
Can credit repair help you in Arkansas to achieve financial stability? How does credit repair work?
To get started, you simply pay $19. They get your credit reports and scores for you, then they load them into your online account, create a strategy designed personally for you, and start working on your credit immediately. You’ll be given login access to your online account where you can see your credit and all three of your credit scores, then one of their experts will begin working on your credit right away.
You may start seeing improvements to your credit in less than 60 days and continue seeing improvements in your credit each month for as long as you’re with them. They will continue to work on your credit until they’ve accomplished the best results possible for you. You can always cancel at any time.
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