Legal Question in Bankruptcy in California

Re: Motion for Relief from the Automatic Stay

The motion is filed and often granted when the property mortgage was in default status at the time a chapter 7 bankruptcy was filed. This is because unlike a chapter 13 bankruptcy, a chapter 7 has no mechanisim (plan) to payback the arrearages on a defaulted mortgage. on the other hand If a chapter 13 was filed, probably there was insufficient equity. Another possibility, is that there was an allegation of fraud on the mortgage application.

Re: Motion for Relief from the Automatic Stay

It simply means that the bank doesn't want to wait until the automatic stay is automatically lifted at the close of the case and wishes to proceed a.s.a.p with the foreclosure sale. Foreclosure is a four-month process from Notice of Default to Trustee's foreclosure sale; but the length of time the automatic stay was in effect freezes that clock temporarily.