What is a “motion to extend the automatic stay” in a Chapter 11 bankruptcy?

A motion to extend the automatic stay is a request in a Chapter 11 bankruptcy for the court to extend the period of time during which creditors are prevented from taking certain actions against the debtor. This motion is often necessary because the automatic stay only lasts for a limited time. In California, the automatic stay is granted when a bankruptcy petition is filed and it prevents creditors from taking any action to collect on a debt. This includes things like filing a lawsuit, repossessing property, or even calling the debtor and demanding payment. The stay is in place to give the debtor some breathing room to reorganize their debts, a key part of the Chapter 11 process. The motion to extend the stay is an important tool for the debtor because it allows them to protect their assets during the reorganization process. This can keep creditors from gaining access to their property and could make it likely that they would receive a better return in the bankruptcy. In California, a motion to extend the stay must be filed no later than 30 days before the date that the stay expires. The debtor must then explain why the stay should be extended and why the creditors will not suffer any harm if it is allowed. The court then decides whether to grant the motion. If it is granted, the stay will remain in effect until the bankruptcy case is completed.

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What is a “motion to extend the automatic stay” in a Chapter 11 bankruptcy?

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