Chapter Twelve. The Automatic
Stay—11 U.S.C 362
 After reading this chapter, you will be able to:
 Describe litigation that occurs in the bankruptcy
system
 Understand the concept of the automatic stay as
an element of debtor relief
 List creditor activities subject to the automatic stay
 List creditor activities not subject to the automatic
stay
 Understand the procedures utilized by creditors to
obtain relief from the stay
Adversary Proceedings
 When an issue is brought before the court in
the form of a motion and is opposed, it is
considered a contested matter.
 A contested matter is treated as an adversary
proceeding pursuant to Federal Rule of
Bankruptcy Procedure 9014.
Automatic Stay
 Automatic stay is a statutory bar to the
conducting of any collection activity by
creditors after a bankruptcy petition has been
filed.
Activity Subject to the Automatic Stay
 Section 362(a)(1) prohibits the
commencement or continuation of any
judicial, administrative, or other proceeding
against the debtor that was or could have
been commenced before the filing of the
petition to recover a prepetition claim.
Actions Subject to Automatic Stay
 Civil actions or administrative legal proceedings.
 Enforcement of judgments
 Acts to obtain possession or control of property of the
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estate
Acts to perfect liens upon property of the estate.
Acts to perfect liens upon property of the debtor
Any act to collect a prepetition claim
The making of setoffs (the common law right of a
creditor to balance mutual debts with a debtor)
Proceedings before the United States Tax Court
Common Actions Excepted from the
Automatic Stay
 Criminal prosecutions
 Collection of alimony, maintenance or support from
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other than property of the estate
Lien perfection within statutory grace period
Governmental proceedings to enforce police or
regulatory powers other than enforcement of money
judgments
Limited setoffs in commodity broker or stockbroker
proceedings
HUD foreclosures subject to National Housing Act
Slide 1 of 2
Common Actions Excepted from the
Automatic Stay
 Issuance of notice of tax deficiency, audit, demand
for returns or assessment
 Expired nonresidential real property lease
 Retirement loan repayments
 Residential evictions
Slide 2 of 2
Motion for Relief from Automatic
Stay
 Moving Party
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Notice of motion
Motion
Declaration of provable value
Exhibits
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Promissory note
Document evidencing security interest (UCC-1,
mortgage, or trust deed
appraisal
Any other document required by local rule
Motion for Relief from Automatic
Stay
 Opposing Party
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Request for hearing
Declaration or affidavits in opposition
Points and authorities
Exhibit: appraisals
Any other document required by local rule
Motion for Relief from Automatic
Stay
 Motion to Impose Stay for Cause Shown
 1. Serial filings 11 U.S.C. §362(c)(3), (4)
 2. Statement of Intention 11 U.S.C. §362(h)
 3. Small Business Cases 11 U.S.C. §362 (n)
 4. Residential evictions 11 U.S.C. §362(b)(22), (l)
30/30/30 Rule
 30 days after a request for relief the stay will
terminate
 a preliminary hearing must be held within 30
days of the motion
 a final hearing, if necessary, must be held
within 30 days of the preliminary hearing.