Relief From Stay

We recently went over relief from stay so I thought I'd share my experience on relief from stay motions at the bankruptcy court last summer...

Relief from stay motions were by far the most common motion I would see at the bankruptcy court. We had stacks upon stacks of them. We would never run out of work because of them. They were also extremely easy. Most days I would start my day doing about 5 relief from stays before moving on to more complex motions or disputes. Sometimes I would take breaks from more complex motions and do a relief from stay to give my mind a break. We would basically have a form we would go through and if the creditor met all the elements we would grant. I think I only denied a few during the entire summer. Most of the time if the motion wasn't granted it was because they were missing something such as deed of title so we would just continue the hearing to a later date.

The vast majority of relief from stays would request relief from §362(d)(1) or (d)(2). Usually relief would be requested under both. §362(d)(2) is easier to analyze. We would just look to see if the property was under water. Typically the creditor didn't even have to provide an appraised value of the property because the debtor would list the property value in their schedules. §362(d)(1) was a little trickier because whether cause for relief is warranted is mostly settled through case law. In California, typically a 20% equity cushion is enough for adequate protection so if the debtor had less than that we would grant the motion. Also, other causes for relief was if the property was declining, whether the debtor had missed regular payments or payments as apart of a bankruptcy plan, or if there was bad faith either by filing multiple bankruptcies or having unauthorized transfers.

The debtor would almost never dispute a relief from stay. However, when they did it was usually over the valuation of the property. This wouldn't be a problem if the creditor used the debtor's schedule to value it. Other common disputes would be over how much a debtor owed and how much payments they missed.