Motion to Lift Automatic Stay Law and Legal Definition
Motion to lift automatic stay is a request made by a creditor to the court to allow the creditor to take action against the debtor or the debtor's property that would otherwise be prohibited by the automatic stay. The automatic stay prevents secured creditors from enforcing their lien rights. Pursuant to 11 U.S.C. § 362(a), the filing of a bankruptcy petition operates as an automatic stay to give a debtor a short respite from creditors' demands, during which a debtor will have the opportunity to develop and implement plans to right his/her financial affairs. Relief from the stay may be granted after notice and a hearing, among other reasons, "for cause." The burden is on the moving party to make an initial showing of cause. Absent such showing, relief from the effect of a stay will be denied. The bankruptcy courts generally look into the Sonnax factors to decide whether or not to lift an automatic stay. However these factors may not be relevant for all cases. The ultimate determination whether to lift a stay depends upon the facts underlying a given motion. The decision of whether to lift the stay is committed to the discretion of the bankruptcy judge, and the appellate court may overturn a denial of a motion to lift the automatic stay only upon a showing of abuse of discretion.[In re Sonnax Indus., 907 F.2d 1280 (2d Cir. Vt. 1990)]
