Sacramento, CA asked in Bankruptcy for California

Q: May a mortgage servicer whose proof of claim was disallowed then move for or receive relief from the automatic stay?

Before the mortgage servicer's claim was disallowed, a previous attempt was made by the mortgage servicer to lift the automatic stay. It failed due to lack of standing.

It was before the proof of claim was disallowed and the motion to lift automatic stay was dismissed without prejudice.

I thought that once a purported creditor's proof of claim was disallowed the same creditor could not afterward move for or receive relief from the automatic stay. Is this so?

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1 Lawyer Answer
Kathryn U. Tokarska
Kathryn U. Tokarska
  • Bankruptcy Lawyer
  • San Diego, CA
  • Licensed in California

A: Probably. Not sure why the proof of claim was disallowed. Generally speaking a secured creditor who is not receiving regular payments can seek motion for relief of stay in order to foreclose on the property. If you are trying to prevent foreclosure and don't have an attorney representing you in your bankruptcy case I strongly urge you to get one.

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