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 court order that prevents creditors from taking action against the debtor. The stay can be issued when a debtor files for bankruptcy, and it lasts for a period of time, usually 30 days or more. The motion to extend the automatic stay is typically filed by the debtor to prevent creditors from collecting debts during the bankruptcy process. Through the stay, creditors are prevented from filing a lawsuit, taking action to seize the debtor’s property, foreclosing on a home, or trying to collect debts during the bankruptcy process. The motion to extend the automatic stay gives the debtor time to reorganize finances, to negotiate payment plans with creditors, and to see if the debtor can avoid a bankruptcy discharge. An extended stay gives the debtor peace of mind and allows them to focus on a better financial future. In Texas, the debtor must file the motion to extend the automatic stay in order to prevent creditors from taking action against them. Once the court approves the motion, the stay will continue until the debtor’s case is resolved. The extension of the stay gives the debtor the opportunity to reorganize their finances without the fear of creditors taking legal action.

Related FAQs

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

Related FAQs

Related Blog Posts