Question 1

What is Section 362 of the Bankruptcy Code?

Accepted Answer

Section 362 (11 U.S.C. 362) creates the automatic stay, one of the most powerful protections in bankruptcy. The automatic stay: immediately halts virtually all collection actions against the debtor when the bankruptcy petition is filed. It stops: foreclosures, repossessions, wage garnishments, lawsuits, utility disconnections, and creditor harassment. The stay is automatic: it takes effect immediately upon filing, without any court order needed.

Question 2

What actions does the automatic stay stop in Florida?

Accepted Answer

FL actions stopped: foreclosure (the foreclosure sale is postponed; the lender cannot proceed without court permission), eviction (some limitations; the stay may not stop an eviction if the landlord already has a judgment for possession), wage garnishment (the employer must stop withholding immediately), lawsuits (all pending lawsuits against the debtor are stayed), utility services (utilities cannot be disconnected for 20 days; the debtor must provide adequate assurance of payment), and repossession (the creditor cannot repossess a vehicle or other collateral).

Question 3

How can a creditor get relief from the automatic stay?

Accepted Answer

Relief from stay (Section 362(d)): a creditor can file a motion for relief from stay asking the court to allow the creditor to proceed. Grounds: cause (the debtor is not adequately protecting the creditor’s interest in the property), no equity and not necessary (the debtor has no equity in the property and the property is not necessary for reorganization), or bad faith filing (the case was filed solely to delay the creditor). In Florida foreclosures: lenders frequently seek stay relief when the debtor is not making adequate protection payments or has no equity in the property.

Section 362

Section 362 (Automatic Stay)

What It Stops

Relief From Stay

Related Terms

Barnes Walker Bankruptcy

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