When you file for bankruptcy, there is an Automatic Stay that goes into effect. The Automatic Stay basically prohibits creditors from calling, writing, or taking any action in an attempt to collect debts from you. (Think of it as being placed in a big protective bubble where you are immune from most creditors.) The Automatic Stay also stops banks from proceeding with foreclosure or repossession.
A Motion for Relief from Stay (MFRS) is a document that’s filed with the bankruptcy court and a way for creditors to get “relief” from the Automatic Stay. It’s a fancy way of saying “Judge, we want permission to continue with the foreclosure, repossession or sale of collateral.”
With foreclosures, a MFRS does not speed up the timeline required under State law to proceed with foreclosure. In another words, if you have not received a Notice of Default, the bank still has to send you the Notice of Default, and wait the required number of days before scheduling a sale date. A MFRS is not filed in every case. Most notably, banks cannot get relief from stay if you are current on your mortgage payments or have opted to retain your home in a Chapter 13. Even if you are behind on your mortgage payment, some banks simply wait until the conclusion of Chapter 7 bankruptcy instead of filing the MFRS.
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