What Is A Relief From Stay And Abandonment
Full Question:
Answer:
Generally, it means that the creditor is seeking to pursue collection action on the debt, despite the bankruptcy filing and decision of abandonment. For example, a bank may file for relief from stay to pursue a foreclosure.
The filing of a bankruptcy case, under any chapter of the Bankruptcy Code, triggers an injunction against the continuance of any action by any creditor against the debtor or the debtor's property. An automatic stay in bankruptcy proceedings immediately stops any lawsuit filed against the debtor and virtually all actions against their property by a creditor, collection agency or government entity. The automatic stay may be a reason for persons to file bankruptcy when they are being evicted or foreclosed on, being found in contempt for failure to pay child support or losing such utility services, welfare or unemployment benefits, their driver's license or job, etc.
Abandonment is also used in bankruptcy law to define what property constitutes the estate of the debtor to be administered by the trustee. Property of the estate may be abandoned at the instigation of the trustee if it is of inconsequential value and benefit to the estate. This method of abandonment has been referred to as "proposed abandonment." Property of the estate may be abandoned pursuant to a request by a party in interest for an order of the Bankruptcy Court directing the trustee to abandon property when such property is burdensome to the estate or that is of inconsequential value and benefit to the estate. This method of abandonment has been referred to as "compelled abandonment." Also, all scheduled property which remains unadministered upon closing of the case is deemed abandoned from the estate and regarded as administered for purposes of closing and reopening the case. This final method of abandonment has been referred to as "deemed abandonment."
