Chapter Twelve. The Automatic Stay—11 U.S.C 362 After reading this chapter, you will be able to: Describe litigation that occurs in the bankruptcy system Understand the concept of the automatic stay as an element of debtor relief List creditor activities subject to the automatic stay List creditor activities not subject to the automatic stay Understand the procedures utilized by creditors to obtain relief from the stay

Adversary Proceedings When an issue is brought before the court in the form of a motion and is opposed, it is considered a contested matter. A contested matter is treated as an adversary proceeding pursuant to Federal Rule of Bankruptcy Procedure 9014.

Automatic Stay Automatic stay is a statutory bar to the conducting of any collection activity by creditors after a bankruptcy petition has been filed.

Activity Subject to the Automatic Stay Section 362(a)(1) prohibits the commencement or continuation of any judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the filing of the petition to recover a prepetition claim.

Actions Subject to Automatic Stay Civil actions or administrative legal proceedings. Enforcement of judgments Acts to obtain possession or control of property of the estate Acts to perfect liens upon property of the estate. Acts to perfect liens upon property of the debtor Any act to collect a prepetition claim The making of setoffs (the common law right of a creditor to balance mutual debts with a debtor) Proceedings before the United States Tax Court

Slide 1 of 2 Common Actions Excepted from the Automatic Stay Criminal prosecutions Collection of alimony, maintenance or support from other than property of the estate Lien perfection within statutory grace period Governmental proceedings to enforce police or regulatory powers other than enforcement of money judgments Limited setoffs in commodity broker or stockbroker proceedings HUD foreclosures subject to National Housing Act

Slide 2 of 2 Common Actions Excepted from the Automatic Stay Issuance of notice of tax deficiency, audit, demand for returns or assessment Expired nonresidential real property lease Retirement loan repayments Residential evictions

Motion for Relief from Automatic Stay Moving Party Notice of motion Motion Declaration of provable value Exhibits Promissory note Document evidencing security interest (UCC-1, mortgage, or trust deed appraisal Any other document required by local rule

Motion for Relief from Automatic Stay Opposing Party Request for hearing Declaration or affidavits in opposition Points and authorities Exhibit: appraisals Any other document required by local rule

Motion for Relief from Automatic Stay Motion to Impose Stay for Cause Shown 1. Serial filings 11 U.S.C. §362(c)(3), (4) 2. Statement of Intention 11 U.S.C. §362(h) 3. Small Business Cases 11 U.S.C. §362 (n) 4. Residential evictions 11 U.S.C. §362(b)(22), (l)

30/30/30 Rule 30 days after a request for relief the stay will terminate a preliminary hearing must be held within 30 days of the motion a final hearing, if necessary, must be held within 30 days of the preliminary hearing.