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

A motion to extend the automatic stay in a Chapter 11 bankruptcy is a formal request made to the court that seeks to extend the protections that the automatic stay provides. The automatic stay is an injunction that temporarily stops creditors from collecting from the debtor. When a debtor files for Chapter 11 bankruptcy, the automatic stay goes into effect and remains in place until the bankruptcy case is closed. The motion to extend the automatic stay gives debtors more time to reorganize their debts under the guidance of a court-approved reorganization plan. The motion can be made at any time during the bankruptcy proceedings, but it must be filed before the expiration of the automatic stay. The court will review the motion and consider the debtor’s reasons for needing an extension, such as if the debtor needs more time to negotiate with creditors or to file documents. In the State of New Mexico, the court generally grants requests to extend the automatic stay and the debtor can continue to enjoy the protections of the stay until the court issues an order to lift it or until the case is closed. It is important for debtors to remember that the protections of the stay will not last indefinitely and the automatic stay may be lifted if the debtor is not making progress in reorganizing their debts or if the court finds that the debtor has violated any of the rules of bankruptcy.

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

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