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 request filed with the court to keep the automatic stay in effect past the expiration date. The automatic stay is a court order which is granted when the bankruptcy petition is filed. It prevents all creditors from pursuing debt collection activities, such as filing lawsuits and attempting to collect on any unpaid debts. In order for the motion to be granted, the debtor must show good cause and the creditors must agree to the stay. The court will consider whether the needs of the debtor (ex. to keep operations going, restructure debt, or protect assets from creditors) outweigh the interests of creditors. In Virginia, the automatic stay provision lasts for 180 days after the bankruptcy case is filed. The motion to extend the stay can be filed for up to 180 days past expiration. If a stay is extended, it should be noted that creditors may be able to file a motion to lift the stay in certain cases. The motion to extend the stay is a powerful tool available to debtors in Virginia and should be done in consultation with an experienced bankruptcy lawyer. Properly navigating the complexities of Chapter 11 bankruptcy can be difficult and it’s essential to have a professional to help ensure the process goes smoothly.

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

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