It depends on whether you want to keep the home or give it up.
Fight it if you want to try to save the home.
Ignore it if you’re surrendering the home anyways.
So when you file bankruptcy, the Bankruptcy Court imposes something called the automatic stay that stays (stops) creditor actions like garnishment, foreclosure, and repossession. If the creditor wants to remove that protection, they file a Motion for Relief from Stay (“MFRS”), asking the court to remove the stay so that they can foreclose (or repossess).
If you were planning on surrendering the home anyways, then you can ignore it. They’ll lift the automatic stay, eventually foreclose on the home, and you will no longer have it in your possession. But since you filed bk first, they CANNOT come after you for the deficiency in most cases, and they CANNOT report it on your credit as a foreclosure. If you do nothing, the home and creditor will go away, and you will suffer no further negative credit or collection repercussions.
Now if you want to keep the home, that’s different story. You can object to the motion, but you usually need to throw money at them to make it go away. If you are three months behind on mortgage payments since filing your bk, then you’ll either need to catch up in one lump sum and start making regular mortgage payments again, or you’ll need to get on a repayment plan plus start making regular mortgage payments again. If you cannot, then they will win the motion, and you’ll lose the home.
You could object and say that you are trying for a loan modification, but unless you have the loan mod in place, this really isn’t a valid objection.
You can also object and say that they are wrong on their calculations, but I’ve only seen a handful of cases where the debtor was correct and the mortgage company was grossly off.
It all comes down to money. If you can throw enough money at them, they will go away.
Here is what a normal Motion for Relief from Stay looks like (I actually received this one last night):
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF UTAH
Bankruptcy Case No. XXX
MOTION TO TERMINATE AUTOMATIC
STAY AS TO LAKEVIEW LOAN
Lakeview Loan Servicing, LLC, hereinafter referred to as (“Secured Creditor”), hereby
moves the Court pursuant to 11 U.S.C., Section 362(d), Bankruptcy Rules 4001 and 9014 and
Local Rules 4001-1 and 9013-1, for an order terminating the automatic stay with respect to the
following described real property (the “property”) located in Tooele County, State of Utah:
XXX, according to the
Official Plat thereof recorded in the office of the Tooele County
Together with a nonexclusive right and easement of use and
enjoyment in and to the Common Areas described, and as provided
for, in said Plat and said Declaration and Covenants, Conditions,
and Restrictions, which include the rights of ingress and egress
over and across the private streets located within said project;
Commonly known XXXXX
so that it may proceed to pursue its rights and remedies under applicable law. This motion is
based on the following.
1. That on or about January 28, 2016, Debtors executed their Note and Trust Deed,
which Note and Trust Deed are in default. Secured Creditor is the current beneficiary of the
Trust Deed. Copies of the Note, Trust Deed, and Assignment of Trust Deed are attached hereto.
2. That Debtors have not made their post-petition monthly payments as required by
their plan and as of November 8, 2017, are in arrears three (3) post-petition payments being from
September 1, 2017 to November 1, 2017.
3. That Debtors have failed to provide Secured Creditor with adequate protection of
its interest in the property.
4. That Debtors have no realizable equity in the property.
5. That the above allegations constitute sufficient cause pursuant to 11 U.S.C.,
Section 362(d) entitling Secured Creditor to an order terminating the automatic stay so that
Secured Creditor may proceed to pursue its rights and remedies under applicable law.
6. That Secured Creditor is entitled to its reasonable attorney’s fees, costs and
expenses for bringing this motion in accordance with its note and trust deed.
7. With respect to Rule 4001(a)(3), the Court should allow immediate enforcement
of any order for relief granted herein.
8. Secured Creditor services the loan on the Property referenced in this Motion. In
the event the automatic stay in this case is modified, this case dismissed, and/or the Debtors
obtain a discharge and a foreclosure action is commenced on the mortgage property, the
foreclosure will be conducted in the name of the Secured Creditor. Secured Creditor directly or
through an agent, has possession of the Note. The Note is either made payable to Secured
Creditor or has been duly endorsed.
WHEREFORE, Secured Creditor moves the Court for the following relief:
1. That the evidentiary hearing to be held within thirty (30) days of the date of this
motion, in accordance with 11 U.S.C., Section 362, be the final evidentiary hearing on this
2. That the automatic stay pursuant to 11 U.S.C., Section 362, be modified and
terminated to permit Secured Creditor to immediately exercise its rights and remedies under
applicable state and federal law. In the alternative, the Debtors should be ordered to provide
Secured Creditor with adequate protection of its interest in the property;
3. For attorney’s fees, costs and expenses and such further or other relief as the Court
4. Any order based on stipulation governing the continuation and termination of the
automatic stay or any order granting relief from the automatic stay should not be amended or
altered or superseded by the confirmation order entered in this case but should be considered a
part of and integrated into the confirmation order. Further, if the automatic stay is terminated
prior to confirmation, the automatic stay should not be reimposed by the entry of the
5. Secured Creditor seeks relief in order to, at its option, offer, provide and enter into
any potential forbearance agreement, loan modification, refinance agreement or other loan
workout/loss mitigation agreement. Any such agreement shall be non-recourse unless included
in a reaffirmation agreement. Secured Creditor further requests that it be allowed to contact the
debtors via telephone or written correspondence to offer such an agreement.