Debtors that are filing a bankruptcy may require the attention of an attorney who can help file the appropriate bankruptcy documents and who understands the bankruptcy procedure. In a courtroom, both the creditor and debtor may motion to bring an issue to the court's attention and have a decision made upon the issue. A motion can result in the dismissal of your case or may require that you perform a certain action. When a motion is filed by the opposing party, it is crucial to respond. Failing to respond to motion can result in the bankruptcy case being dismissed. A bankruptcy attorney should have the knowledge of the different types of motions that may be used to proceed with a court case. Knowing how to answer a motion and how to use a motion is critical to the advancement of your case.
Individuals who are filing a Chapter 7 bankruptcy will usually not have to worry about a motion unless it is the motion to lift the automatic stay. However, if you are filing for a Chapter 13, you may be required to file a couple of motions. A motion can affect the outcome of your bankruptcy so you want to be backed by an attorney that can defend your case. If you wish to learn more about motions in a bankruptcy, you are encouraged to speak with a local bankruptcy expert. A bankruptcy attorney can answer any question you may have about bankruptcy. To speak with the Bankruptcy Attorney, you may contact our office at 424-285-5525.
The following section will highlight some of the most common motions in a bankruptcy.
Motion to Confirm
Individuals that are filing a Chapter 13 bankruptcy will be required to submit a wide array of financial documents and statements. One of the most important articles that you will submit when you file a bankruptcy reorganization is a repayment program that outlines how you will pay back your debt. The plan should include how much you will pay your creditors and the duration of the repayment program. Upon submitting your repayment program, you will be required to distribute the repayment plan to your creditors (if the court fails to do so). Creditors must be notified of the repayment program and should have a clear understanding of the terms and conditions of the program to avoid confusion and problems in the future. Once the payment program is distributed and submitted, the debtor's party will be required to submit a motion to confirm. A motion to confirm results in the court either accepting or denying the Chapter 13 repayment program. Once you submit your documents and the motion to confirm, the court assumes that your situation remains the same until you make a motion to modify.
Motion to Modify
You may make modifications to your repayment program up until your repayment program is confirmed. When the Chapter 13 repayment program is submitted, the debtor may have to wait a couple of months before the program is confirmed and accepted by the bankruptcy court. If during the waiting time your economic situation changes, you may submit an up to date document. It is important to know that if your economic situation changes meaning that if your earning potential increase or decrease, you will be required to modify your repayment program to reflect your economic situation. Modifications are common before confirmation so speak to your attorney if there are any changes you wish to make to your payment program.
Furthermore, a debtor may file a motion to modify their repayment plan after it has been confirmed by the bankruptcy court. A repayment program can last three to five years so it is very common for debtors to experience new economic circumstances throughout the life of their Chapter 13. When debtors experience a change in income or earning potentials they will want to motion to modify their repayment program. Debtors that file a motion to modify should be ready to explain how their circumstance has changed and should be ready to provide documentation. A modification to a bankruptcy payment program is more common than you think so if your situation has changed from the time your program was confirmed, you should feel free to make the modifications.
Motion to Value
In a bankruptcy, the value of your possessions will have an impact on your repayment program. In Chapter 13, you will be required to pay off the value of your non-exempt property to your unsecured creditors. In Chapter 7, the debtor is required to liquidate their property and use the earnings to pay off their creditors. The earnings that would result from the selling of your non-exempt property would ideally be used to pay off your creditors, so through a Chapter 13, the value of your non-exempt property will be used to determine how much you will be required to pay in your payment program. In other words, debtors are required to pay the value of their non-exempt property which would normally be sold off to pay creditors. For instance, if the value of your non-exempt property amounts to $20,000 or (x) amount of money, you will be required to pay off this amount to your creditors. Since the value of your assets affects your bankruptcy, you may want to have your property valued by the bankruptcy court, especially, if your property is prized above the market value. For this reason, a motion to value is a very powerful tool that can save you a lot of money.
When you motion to value, you will have the bankruptcy court place a value on your property such as your home or vehicle. The purpose of the motion is to prove that the value of your property is much less than the amount you owe on a mortgage or a vehicle loan. In addition, the motion to value property may extend to property such as your furniture or electronics. To learn about the motion to value and how it may apply to your case, you will want to speak with a local attorney.
Motion to Avoid a Lien
When creditors do not receive payment they may take legal action to claim some of your property as a form of payment. A creditor may file a judgment lien on the debtor's property including their home or vehicle. When the property is sold off, the lien will need to be paid off. A lien ensures that when a property is sold some of the earnings will be used to pay off what is owed. A motion to avoid a lien can help prevent a judgment lien while you are filing a Chapter 13 bankruptcy. If you are facing a judgment on a lien, you may want to consult with your attorney to see the best way to prevent a lien.
Debtors Motion to Incur Debt
Debtors who are filing a bankruptcy are unable to apply for consumer credit or loans unless they are permitted by the bankruptcy court. Any time during a bankruptcy a debtor may face a situation that requires an emergency fund. If you suffer an injury and you require credit to pay off a medical procedure or you need to fix your vehicle, then you may motion to incur debt. When you motion to incur debt the bankruptcy court will either accept or deny your request. Debtors that wish to incur debt while undergoing a bankruptcy may be required to explain how the debt will benefit their situation. Debtors that wish to buy material goods or have no real use for the credit line will more often than not be denied the request. If it is an emergency you will want to notify your attorney so that she or he may proceed with a motion to incur debt. In most cases, the request occurs informally between debtor and bankruptcy trustee.
Motion for Relief from the Automatic Stay
A Motion for Relief from the Automatic Stay may result in the lift or removal of the Automatic Stay protections placed on a debtor after filing a bankruptcy. Creditors that want to claim a property or pursue payment during a bankruptcy will need to receive permission from the bankruptcy court. To proceed with debt collection after receiving notice of a bankruptcy, the lending party must file a motion to lift the stay. Without approval, the lending party may not contact the debtors to pursue a payment. A creditor’s party may not call, text, email, and mail documents that pertain to debt collection. However, upon receiving approval, a debt collector may proceed with a court hearing.
Filing a Motion for Relief from the Automatic Stay
To lift the Automatic Stay, the debt will need to submit the following documents to the bankruptcy court
- Court fee: $176.00
- Original Motion for Relief from the Automatic Stay: Formal statement requesting relief from the bankruptcy court to pursue an interest.
- Original Notice of Motion and Opportunity to Object: Creditors must notify the debtor's party of their right to object to a Motion for Relief from the Automatic Stay. The receiving party will have fourteen days to respond to the motion after receiving notice.
- Proposed Order granting the motion
- A brief that supports the motion (no more than 20 pages)
- A Certificate of Service: The Movant (party pursuing the lift) needs provides a Certificate of Service to the bankruptcy court that provides the dates that the Motion, Notice, and Order were served, the name and address of all the parties served, and the title of the documents that were served. To serve the bankruptcy documents the Movant will need to present the documents to the receiving party. The documents may be served through the mail, in person, or through an attorney. Furthermore, the documents need to be served to both the debtor and the debtor's attorney.
Motion to Extend Automatic Stay/Motion to Initiate Automatic Stay
The automatic stay offers a debtor protection from debt collecting activity while filing a bankruptcy. The stay is automatic meaning that it comes into effect as soon as the bankruptcy is filed and does not require a court action. The debtor is protected by automatic stay up to 30 days after a Chapter 7 creditors meeting. In Chapter 13 the automatic stay will last throughout the life of a repayment program. After the life of the bankruptcy, the automatic stay will terminate. To extend the automatic stay the debtor will be required to submit documents that explain the reasons for the debtor’s request. To learn more about extending automatic stay you may follow this link to the U.S Courts.
A Motion to Initiate Automatic Stay will also require the debtor to submit documents that show reasons for requesting the automatic stay. Debtors that have filed a bankruptcy after filing for bankruptcy within a year may be required to request to initiate the automatic stay. An attorney can assist you with the filing procedure to ensure that your request is processed and to help inform you of your qualifications for bankruptcy. Keep in mind that not everyone may qualify for bankruptcy debt relief.
Motion to Dismiss
A creditor can motion to dismiss a debtor's bankruptcy when they fail to follow the requirements of their bankruptcy agreements. A Chapter 7 bankruptcy has a life of three to four months and a Chapter 13 may last up to five years. At any point in during a bankruptcy if a creditor motion to dismiss your case you may want to speak with an attorney to challenge the motion.
Debtors who file a Chapter 7 bankruptcy will be required to abide by the Chapter 7 requirements which include attending a creditors meeting and giving up their non-exempt property to a bankruptcy trustee. Since the debtor has undergone a means test, it means that they qualify for a liquidation bankruptcy. The Chapter 7 process is very short and promises the quickest route to debt discharge. Chapter 7 is a procedure that is rarely interrupted by motions after the debtor has completed a means test.
On the other hand, Chapter 13 is a much longer process that is often interrupted by motions. A creditor may file a motion against a debtor for failing to abide by certain agreements and a debtor may file to modify a claim or object to a motion. Chapter 13 bankruptcy cases last up to five years, time enough to allow a change in circumstances.
Motions require the attention of an attorney who is knowledgeable about motions and bankruptcy court proceedings. To speak with the Bankruptcy Attorney about your case, you may contact our office at 424-285-5525.