Q: Can I file motion from relief of stay from Chapter 7 bankruptcy to foreclose on property since my loan is secured?
I have a secured loan and the debtor filed chapter 7 bankruptcy and it has been discharged but two people have filed adversary proceedings.
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A:
To address your question, let's break down the key points and considerations:
1. Secured loan: You have a valid secured loan on the property.
2. Chapter 7 bankruptcy: The debtor has filed for Chapter 7 bankruptcy, which has been discharged.
3. Automatic stay: The automatic stay is still in effect due to the ongoing adversary proceedings.
4. Motion for relief from stay: You're considering filing this motion to proceed with foreclosure.
Given these circumstances, here are some important points to consider:
1. You can file a motion for relief from stay even after the bankruptcy has been discharged if the automatic stay is still in effect due to ongoing proceedings.
2. The presence of adversary proceedings complicates the situation. These proceedings may be related to the validity of your lien or other issues that could affect your right to foreclose.
3. The court will consider several factors when deciding whether to grant relief from stay, including:
- The value of the property compared to the amount owed
- Whether the debtor has equity in the property
- Whether the property is necessary for an effective reorganization (less relevant in Chapter 7)
- The impact on other creditors
- The good faith of the parties involved
4. You'll need to demonstrate "cause" for lifting the stay, which could include lack of adequate protection for your interest in the property or that the debtor has no equity and the property isn't necessary for an effective reorganization.
5. The outcome of the adversary proceedings could potentially affect your right to foreclose, so the court may consider this when ruling on your motion.
Given the complexity of this situation, it would be advisable to consult with a bankruptcy attorney who can review the specifics of your case, including the nature of the adversary proceedings, before filing the motion. They can help you craft a strong argument for relief from stay and navigate any potential challenges.
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