What if the court will not lift the stay?

court unlift consumer bankruptcy

What if the court will not lift the stay?

If the bankruptcy court determines that it will not lift the stay, then the proof of claim becomes in effect a complaint in the bankruptcy court, and the claim (both validity and amount) will be decided in the bankruptcy court or the district court. There are times, however, when a Chapter 11 debtor will for its own reasons (usually associated with a shortage or lack of funds to pay litigation counsel) will concede the claim and then attempt to reduce it or re-characterize it in a plan of reorganization; this is a very technical and complicated procedure and counsel is absolutely necessary for the claimant. This plan process is referred to as “restructuring”, and it can definitely affect the litigants’ rights and liabilities.

(Reviewed 11.14.08)

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