The automatic stay is a legal protection that automatically stops most collection activities, including wage garnishment, bank account levies, and foreclosure proceedings, once a bankruptcy case is filed.
However, a creditor can ask the bankruptcy court to lift the automatic stay for a specific debt or obligation. This is typically done when the creditor believes that it has a valid claim against the debtor that is not dischargeable in bankruptcy.
To lift the automatic stay, the creditor must file a motion with the bankruptcy court and provide evidence to support its request. The bankruptcy court will then review the motion and determine whether to grant or deny the request.
If the court grants the request to lift the automatic stay, the creditor may be able to resume collection activities against the debtor for the specific debt or obligation. However, the automatic stay remains in effect for all other debts and obligations.
It’s important to be aware that even if the automatic stay is lifted, the creditor must still comply with all applicable bankruptcy laws and rules, including the discharge injunction, which prohibits creditors from attempting to collect on a debt that has been discharged in bankruptcy.
If you are facing a request from a creditor to lift the automatic stay, you may want to consider speaking with a bankruptcy attorney to determine your rights and options in the matter.