- Who sends it
- Your mortgage lender or servicer, usually through its lawyer, filed in your bankruptcy case
- What it starts
- A response deadline and a hearing. The stay can end automatically 30 days after the motion unless the court keeps it in place
- Do this first
- Find the response deadline and hearing date and send the motion to your bankruptcy lawyer
What this motion is
When a bankruptcy case is filed, an automatic stay goes into effect. It stops creditors from starting or continuing a court case against you, from enforcing a lien against your property, and from other collection acts, including a foreclosure. The federal courts explain that the stay arises by law, without any action by the judge, as soon as the petition is filed.
A creditor can ask the bankruptcy court to end, change or put conditions on the stay. This request is a motion for relief from stay. If the court grants it for your mortgage lender, the lender can go back to its foreclosure under your state's process. The bankruptcy case itself can continue.
Why lenders file it
- For cause, including lack of adequate protection. Adequate protection means the lender's interest in the home is being protected while the stay is in place. For example, a lender may argue its interest is not protected because payments that came due after the filing were not made.
- No equity. The court must also lift the stay if you have no equity in the home and the home is not needed for an effective reorganization. The lender has to prove the equity part; you have to prove the rest.
- A scheme to delay. If the court finds the filing was part of a scheme to delay, hinder or defraud the lender that involved transferring part of the home without the lender's consent, or multiple bankruptcy filings affecting the home, it can enter an order that, once recorded, also applies to any bankruptcy case affecting that home filed in the next 2 years.
Deadlines and how to count them
- 30 days: the stay ends for the lender 30 days after it files the motion, unless the court, after notice and a hearing, orders it to stay in place. The court must keep it in place if there is a reasonable likelihood you will win at the final hearing.
- 60 days: in a Chapter 7, 11 or 13 case filed by an individual, the stay ends 60 days after the motion unless the court makes a final decision within those 60 days, or the period is extended by agreement or by the court for good cause.
- Your response deadline: the motion or the notice that comes with it gives a date to file a response or objection and a hearing date. Do not miss it.
- One earlier case dismissed in the past year: the stay in the new case ends on the 30th day after filing unless the court extends it after a hearing completed within those 30 days, and you must show the new case was filed in good faith.
- Two or more earlier cases dismissed in the past year: no stay goes into effect at all unless the court orders one on a request made within 30 days of filing.
- 180 days: the federal courts explain that you generally cannot file again for 180 days if an earlier case was dismissed for willfully failing to appear or obey court orders, or you dismissed it yourself after a creditor asked for relief from the stay.
What it does and does not mean
- It is not a foreclosure sale and not an eviction. The stay stays in place until the court rules or one of the time limits above ends it.
- If the stay is lifted, the lender can continue the foreclosure under state law. Your state's notices and deadlines still apply; see your state's foreclosure process, such as Florida, California or Ohio.
- In Chapter 13, you can cure a home mortgage default only until the home is sold at a foreclosure sale held under state law. You must also make the regular mortgage payments that come due after filing, or you may lose the home. See Chapter 13.
- In Chapter 7, a discharge does not remove the mortgage lien. Once the stay ends, the lender can still foreclose if the loan is behind.
What to do this week
- Send the motion and any notice to your bankruptcy lawyer today, and ask whether to file a response before the deadline. If you filed without a lawyer, look for one now through legal aid or the bar referral service on your state's page and lawyers by city.
- Gather proof of every payment you made since filing: bank records, receipts and confirmation numbers. A lender's payment history can be wrong.
- If you are behind on payments that came due after filing, ask your lawyer whether you can catch up, change your Chapter 13 plan, or ask the court to keep the stay with conditions, such as a schedule of payments. The law lets the court condition the stay instead of ending it.
- Go to the hearing, or make sure your lawyer will.
- Ask your lawyer before you talk to the servicer about a loan modification or other help, so that anything you agree to fits your bankruptcy case. A free HUD-approved housing counselor at (800) 569-4287 can explain your options.
Scams tied to bankruptcy and the stay
People facing a sale date are often pitched quick fixes. Watch for:
- Anyone who asks you to transfer part of your home to them, or to someone else, so a bankruptcy can "stop the sale". A filing that is part of a scheme involving a transfer without the lender's consent can lead to an order that blocks stay protection for the home for 2 years.
- Anyone who offers to file a bankruptcy in your name for you, or promises that filing again will keep stopping the sale. Repeat filings get a shorter stay or no stay at all.
- Anyone who asks for a fee before you have signed an agreement with your servicer. A company that is not your lawyer cannot charge for mortgage relief until then.
- Anyone who tells you to stop talking to your servicer, your housing counselor or your lawyer.
Read how to spot a foreclosure rescue scam. Report fraud at ReportFraud.ftc.gov.
How much time do you have? It depends on your state.
See the foreclosure timeline, deadlines and free local help for the state where the home is.
Common questions
Does a motion for relief from stay mean I will lose my home?
Not by itself. The judge decides whether to lift the stay, and the court can keep it in place or set conditions. Even if the stay is lifted, the lender still has to finish a foreclosure under state law. But the deadlines are short, so act right away.
Can I stop the motion by catching up on payments?
Sometimes. If the motion is based on missed payments since filing, catching up or agreeing to a payment schedule may resolve it. Talk to your bankruptcy lawyer before the response deadline.
What happens if I do nothing?
The court may grant the motion, and in most cases the stay also ends on its own 30 days after the motion unless the court keeps it in place. The lender can then go back to its foreclosure.
I filed bankruptcy before and the case was dismissed. Am I protected?
Less. If one earlier case was dismissed in the past year, the stay ends on the 30th day unless the court extends it. If two or more were dismissed in the past year, there is no stay unless the court orders one. Talk to a bankruptcy lawyer before filing again.
Keep reading
- Late notice and early intervention letterThis letter is a warning, not a foreclosure. Federal rules make your servicer reach out early and tell you about help. In most cases a foreclosure cannot start until you are more than 120 days behind, so this is the best time to act.
- Breach letter (demand or notice of intent to accelerate)A breach letter says you are in default and gives you a date to catch up. If you do not, the lender can call the whole loan due and move toward foreclosure. Many standard mortgages and deeds of trust require at least 30 days to cure.
- Notice of defaultIn many states that foreclose without a court, a recorded notice of default is the official start of the foreclosure. It is not a sale and not an eviction. It starts a waiting period before a sale can be set, and you can usually still catch up or apply for help.
- Notice of intent to forecloseMany states make the lender send a warning letter before it can start a foreclosure. These letters often give you a set number of days, a cure amount and a list of free counselors. The deadline in the letter matters, so act on it now.
- Lis pendens (notice of pendency)A lis pendens is a public notice, filed in the land records, that a lawsuit or foreclosure affecting your home is pending. It does not mean the home is sold or that you must move. It usually means the court papers are coming or have already been served.
- Foreclosure summons and complaintA summons and complaint means the lender has sued to foreclose. You have a short, firm deadline to respond in writing, often 20 to 30 days from the day you were served. Missing it can let the lender win without your side being heard.