Ville Platte, LA asked in Bankruptcy for Louisiana

Q: What does a motion to lift stay and for abandonment mean in a bankruptcy. I filed a chapter 7 but excluded my home mort,

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1 Lawyer Answer
W. J. Winterstein Jr.
W. J. Winterstein Jr.
  • Bankruptcy Lawyer
  • Boyertown, PA

A: The Bankruptcy Code, and the several Schedules of assets and debts, signed under penalty of perjury, do NOT permit you to "exclude" any debt or claim, or any asset. If you failed to mention your home mortgage indebtedness, amend your bankruptcy Schedules as soon as possible.

At the moment you file a bankruptcy case, an automatic stay is triggered that prohibits all your creditors from taking any action against you or your property, so that your creditors can only pursue you and your assets in the bankruptcy court. If, for example, the holder of your mortgage desires to foreclose, it can ask the court for permission to do so in the state courts. That's essentially what a Motion to lift stay is, in your circumstances.

A motion to abandon is a request, or if filed by a bankruptcy trustee, a notice, that the asset to be abandoned will no longer be considered an estate of the bankruptcy "estate", and therefore, no longer protected by the automatic stay. It is common for a trustee to "abandon" property subject to a mortgage where there is little or no equity value in the asset that the trustee can liquidate for the benefit of creditors.

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