11 U.S.C. § 362

Section 362(a)(1) automatically stays the commencement of an action against a debtor upon filing of a bankruptcy petition, but does not stay the action against other named defendants.

Akers v. Bonifasi · filed 1985-11-14(a)(1)

The filing by the defendant Mobile Telephone of America, Inc. (Mobile Telephone) of a petition in the United States Bankruptcy Court for the District of Arizona on February 9, 1984 operated automatically to stay the commencement of this action as to that debtor, but not as to the other persons named defendants herein.

Section 362 automatically stays a creditor from accelerating a debt after the debtor files a bankruptcy petition.

Gass v. Mid-State Homes, Inc. (In Re Gass) · filed 1985-12-31

Acceleration after the bankruptcy petition was filed was automatically stayed. 11 U.S.C. § 362.

Section 362(a)(6) bars a school from withholding a Chapter 13 debtor’s transcript to collect dischargeable student loan debt.

Virginia Union University v. Parham (In Re Parham) · filed 1986-01-02(a)(6)

For the foregoing reasons, the Court finds that Virginia Union is not within its rights in retaining Parham’s transcript until she becomes current on her student loan obligations. The case law is clear that a petition under Chapter 13 prohibits a creditor from attempting to collect any debt by any act, provided that such debt would be dischargeable under Chapter 13.

Section 362 prohibits a creditor from collecting a pre-petition debt from post-petition earnings that are property of the estate, and a claimed recoupment does not exempt that collection from the automatic stay.

Ohning v. Schneider National Transcontinental, Inc. (In Re Ohning) · filed 1986-02-14

No argument has been made that would justify exempting a recoupment from 11 U.S.C. § 362. Any action by a creditor, such as Schneider, to collect a pre-petition debt, such as the negative balance in the Ohn-ings’ truck account, from property of the estate, such as Ohnings’ post-petition earnings, is a paradigm example of the activity specifically prohibited by the automatic stay.

Section 362(a)(6) bars a creditor’s postpetition demand for payment of a prepetition debt.

Matter of Lauretti Corp. · filed 1986-03-07(a)(6)

The Bank’s demand, in literal terms, violated the automatic stay. This demand constituted an “act to collect ... a claim against the debtor that arose [prepetition],” § 362(a)(6).

Section 362(a)(6) prohibits a state from refusing to transfer a debtor’s liquor license to collect its claim without first seeking relief from the automatic stay, even when state law entitles it to payment.

State of California v. Farmers Markets · filed 1986-06-26(a)(6)

We agree, however, that the State's refusal to transfer the licenses constituted an act to collect or recover a claim, and thus violated Sec. 362(a)(6). The State refused to transfer the licenses in an effort to obtain payment of its claims without first seeking relief from the automatic stay from the bankruptcy court. That the State was correct in claiming that it was entitled to assert Sec. 24049 despite the pendency of bankruptcy proceedings does not excuse it from complying with the Code's procedures.

Section 362(a)(6) prohibits a state from refusing to transfer a liquor license to collect a prepetition claim without first obtaining relief from the automatic stay.

California v. Farmers Markets, Inc. · filed 1986-06-26(a)(6)

We agree, however, that the State’s refusal to transfer the licenses constituted an act to collect or recover a claim, and thus violated § 362(a)(6). The State refused to transfer the licenses in an effort to obtain payment of its claims without first seeking relief from the automatic stay from the bankruptcy court.

Section 362(a)(6) requires a creditor who learns of a bankruptcy filing to stop execution on a judgment the creditor set in motion before the petition.

Summerlin v. Outlaw (In Re Outlaw) · filed 1986-10-10(a)(6)

However, Mr. Summerlin did violate the stay when, after learning that Mrs. Outlaw had filed for bankruptcy, he did not notify the Wake County Sheriff’s Department that they should not execute on his judgment against Mrs. Outlaw because of the pending bankruptcy.

Section 362(a) stays efforts to collect a HEAL loan during a Chapter 13 case even if the loan may be nondischargeable.

In Re Gronski · filed 1986-10-16(a)

Should there be any doubt as to this score, the Court emphasizes that it believes that the stay imposed by § 362(a) is in place as to any efforts of HHS to collect the HEAL loan debt and that it may be difficult for the Government to succeed in a motion to obtain relief from the stay, since the Debtor is presumably utilizing all of his available financial resources to make his payments under the Plan and would be unlikely to be able to pay his HEAL loan and meet his obligations under his Plan in this Court.

Section 362(a)(6) does not bar a mere request for payment, including presentment of a negotiable instrument, unless the request involves coercion or harassment.

Morgan Guaranty Trust Company Of New York v. American Savings And Loan Association · filed 1986-11-26(a)(6)

We conclude that the language and purposes of section 362(a) do not bar mere requests for payment unless some element of coercion or harassment is involved.

Section 362(a)(6) bars a creditor from pursuing a state court contempt proceeding to collect a prepetition debt after the debtor files for bankruptcy.

In Re Tweed · filed 1987-08-10(a)(6)

The violation of the automatic stay provisions of § 362(a) by Mrs. Tweed and her attorney is clear and uncontradicted. At no time has Mrs. Tweed sought a determination from this court as to the discharge-ability of the debtor’s debt repayment obligations as fixed by the October 14, 1986 order of the Blount County Circuit Court. Mrs. Tweed and her attorney continued to pursue their debt collection efforts through the Blount County Circuit Court with full knowledge of the debtor’s pending bankruptcy case and went so far as to have the debtor placed in jail.

Section 362 does not stay execution of a bankruptcy court judgment of nondischargeability against property of the debtor that is not property of the estate.

Watson v. City National Bank (In Re Watson) · filed 1987-09-09(a)(1), (a)(6)

Therefore, this Panel concludes that the automatic stay provisions of Section 362 do not preclude the execution of a judgment, which has been held by the bankruptcy court to be non-dischargeable, upon property of the debtor which is not property of the estate.

Section 362(a) prohibits creditors from using threats or coercion to obtain payment of prepetition debts.

In Re Structurlite Plastics Corp. · filed 1988-05-16(a)

Selective re-payment of pre-petition debt should not be authorized as a result of threats or coercion by disgruntled creditors. Such activity is violative of the automatic stay imposed by 11 U.S.C. § 362(a) and, if tolerated, would negate the fundamental principle of equality of treatment among similarly situated creditors.

Section 362 stays a secured creditor from collecting assigned contract payments after the debtor files for bankruptcy.

Matter of Manuel Fajardo · filed 1988-07-25

Upon the commencement of this bankruptcy case, C & S was stayed under Title 11 U.S.C. § 362 from exercising its rights to collect under the contract. The automatic stay would have a similar effect where a bank seeks to exercise its rights in collateral under U.C.C. §§ 9-504 or 505.

Section 362 stays a secured creditor from exercising its right to collect contract payments when the debtor files for bankruptcy.

In re Fajardo · filed 1988-07-25

Upon the commencement of this bankruptcy case, C & S was stayed under Title. 11 U.S.C. § 362 from exercising its rights to collect under the contract.

Section 362(a) bars a creditor from continuing a prepetition suit against the debtor, obtaining a writ of execution, or enforcing that writ against the debtor’s employer.

In Re Calender · filed 1988-08-15(a)

Mr. Pearson’s actions, in continuing to prosecute his civil action in the Superior Court against the Debtor, obtaining a writ of execution, and seeking to enforce that writ against the Debtor’s em'ployer, all violated the automatic stay of 11 U.S.C. Section 362(a).

Section 362 prohibits a bank from retaining postpetition sublease rents to reduce the debtor’s prepetition debt.

In Re Gillis · filed 1988-10-19

It is clear that the Bank’s retention of post-petition rental income collected from Gillis' subtenants to reduce Gillis’ pre-petition indebtedness to the Bank violates the automatic stay.

Section 362(a)(6) bars a creditor with notice of bankruptcy from trying to collect a prepetition debt by persuading the debtor to refinance it.

Rodriguez v. AVCO Financial Services, Inc. (In Re Rodriguez) · filed 1988-11-30(a)(6)

Section 362(a)(6) stays any collection action of a prepetition claim against the debtor. ... The evidence further shows that AVCO continued its collection attempts against the debtor after bankruptcy and, further insisted on refinancing the debt under the name of the debtor’s disabled mother. We further find that AVCO incurred in a clear and willful violation of the automatic stay with sufficient knowledge that the debtor had filed bankruptcy.

Section 362(a)(6) does not make a tenant’s refusal to pay rent that is not due to a debtor a violation of the automatic stay.

TM Carlton House Partners v. Career Planners, Inc. (In Re TM Carlton House Partners, Ltd.) · filed 1988-12-09(a)(6)

It is not a violation of the automatic stay for a tenant to decline to make rental payments to a debtor which are not in fact due to it.

Section 362 stays a motor vehicle agency’s collection of prepetition merit rating surcharges from a Chapter 13 debtor between the petition and discharge.

In Re Adams · filed 1989-01-20(a)(6)

It is clear that a Chapter 13 debtor is protected from collection efforts by the DMV during the interim between the filing of the Chapter 13 petition and the entry of discharge by the automatic stay of 11 U.S.C. § 362.

Section 362(a)(6) bars a creditor from using public signs to coerce a debtor into paying a prepetition claim.

Sechuan City, Inc. v. North American Motor Inns, Inc. (In Re Sechuan City, Inc.) · filed 1989-02-06(a)(6)

The conduct of defendants was designed to coerce payment of the lessor’s prepetition claim from the debtor and so violated 11 U.S.C. § 362(a)(6).

Section 362 prohibits the IRS from sending a notice threatening to levy for prepetition taxes after a bankruptcy filing, and a willful violation makes it liable for an individual debtor’s reasonable attorney’s fees and costs.

In Re Price · filed 1989-08-23(a)(1), (a)(6), (h)

For the foregoing reasons, the Court finds that the IRS has willfully violated the automatic stay under section 362(a)(1) and (a)(6). The IRS is liable to the Debtors for their actually incurred reasonable attorney’s fees and costs pursuant to section 362(h).

Section 362(a)(1) requires a creditor that initiated a collection proceeding before bankruptcy to take affirmative steps to stop its continuation after the petition is filed.

Ledford v. Tiedge (In Re Sams) · filed 1989-08-30(a)(1)

The provisions of the automatic stay place the responsibility to discontinue any pending collection proceedings squarely on the shoulders of the creditor who initiated the action.

Section 362(a)(6) stays efforts to collect a presumptively nondischargeable student loan until a court determines it is nondischargeable; withholding a transcript to compel repayment or reaffirmation is an act to collect the debt.

California State University, Fresno v. Gustafson (In Re Gustafson) · filed 1990-02-28(a)(6)

The automatic stay applies to preclude a creditor's attempts to collect a claim that is presumed, but not yet determined by the bankruptcy court, to be nondischargeable under section 523(a)(8). We affirm the bankruptcy court's implicit finding that CSUF's actions in withholding the transcript constituted an act to collect a pre-petition claim in violation of section 362(a)(6) and that such actions were willful and caused injury to the debtor.

Section 362(a) does not bar a credit union from applying a previously adopted, nondiscriminatory policy that denies account privileges to members who cause it a financial loss.

In Re Henry · filed 1991-05-29(a)

I find no language in § 362(a) which would prohibit the credit union’s implementation of the previously adopted nondiscriminatory policy that denied membership account privileges to the debtors.

Section 362(a) automatically stays IRS collection activities when a bankruptcy petition is filed.

In Re Dakota Industries, Inc. · filed 1991-09-04(a)

IRS collection activities are subject to the automatic stay.

Section 362 stays collection of postconfirmation payments on a prepetition debt owed to a creditor named in the Chapter 13 petition, even if the debt is omitted from the plan.

SouthTrust Mobile Services, Inc. v. Englebert · filed 1992-01-21

It was correct in not doing so, because the automatic stay provided by 11 U.S.C. § 362 does apply to the collection of post-confirmation payments on any debt, secured or not, whether mentioned in the plan or not, if the debt precedes the filing of the Chapter 13 petition and the creditor was named in the petition.

Section 362 does not apply to a payment made before the bankruptcy petition was filed.

Jarboe v. United States Small Business Administration (In Re Hancock) · filed 1992-03-09

Since the payment occurred pre-petition, 11 U.S.C. § 362 cannot be involved.

Section 362(a) stays customers of a broker-dealer that files a Chapter 11 petition from collecting debts owed to them or recovering property held by the broker-dealer.

Securities Investor Protection Corp. v. Blinder, Robinson & Co. · filed 1992-04-13(a)

From the standpoint of the customers, the automatic stay provision of the Bankruptcy Code that took effect upon the filing of the Chapter 11 petition prevented them from taking virtually any action to collect debts owed to them or to recover their property held by the broker-dealer.

Section 362(a)(6) bars a creditor from trying to induce voluntary repayment of a prepetition debt when the action could significantly affect the debtor’s decision and would be unfair to a reasonable person under the circumstances.

In Re Briggs · filed 1992-07-29(a)(6)

In summary, an action ... taken by a creditor in the process of seeking voluntary repayment of a prepetition indebtedness violates § 362(a)(6) only if the action (1) could reasonably be expected to have a significant impact on the debtor’s determination as to whether to repay, and (2) is contrary to what a reasonable person would consider to be fair under the circumstances.

Section 362 does not prevent creditors from recovering debts from nondebtor third parties when they do not act against the debtor or estate property.

In Re Kirby · filed 1992-09-17

Based upon the facts of the matter under consideration here, the Court holds that Whitley can recover from a nondebtor third party. The provision of § 362 automatic stay privileges are not to be utilized for the purpose of obstructing every possible method open to creditors to recover the debts owed to them from persons who have not filed bankruptcy.

Section 362 requires judgment creditors to collect through the bankruptcy proceeding unless the bankruptcy court lifts the automatic stay.

Supporters to Oppose Pollution, Inc. v. The Heritage Group · filed 1992-10-05

The bankruptcy proceeding serves that function too, and 11 U.S.C. § 362 obliges judgment creditors to use that forum exclusively unless the bankruptcy court lifts the automatic stay (which it has not).

Section 362(a)(6) bars a creditor from applying post-petition cash collateral to an outstanding pre-petition debt.

Lowe v. Sheinfeld, Malley & Kay, P.C. (In Re Saunders) · filed 1993-04-09(a)(6)

While SMK’s receipt of the post-petition Distributions constituted cash collateral in its possession, the application of the monies received to the outstanding debts clearly violated the automatic stay.

Section 362(a)(6) does not bar a creditor from collecting an independent claim against a third party, even if that collection results in a credit against the debtor’s obligation.

In Re Alcom America Corp. · filed 1993-04-14(a)(6)

Because the claims were separate and independent, ABC’s postpetition actions are properly regarded as acts “to collect, assess, or recover” the bank’s claim against A.E. Staley, not its claim against the debtor. As such, ABC’s postpetition conduct did not violate § 362(a)(6).

Section 362’s automatic stay applies to an ancillary debt collection proceeding in bankruptcy that adversely affects the debtor.

In Re St. Elmore Armistad, Debtor. American General Finance Company, Inc. v. Armistad · filed 1993-04-22(a)(1), (a)(6)

This appeal presents the question of whether an ancillary debt collection proceeding in bankruptcy adversely affects a debtor to the extent that the automatic stay provisions of 11 U.S.C. § 362( )(1) and (A)(6) are violated. The district court held that it does. We affirm. ... We have carefully reviewed the record and the authorities cited and conclude that no error was committed by the district court with respect to the applicability of the automatic stay provision.

Section 362(a)(6) prohibits applying postpetition payroll deductions to a prepetition debt and refusing to return the payments on the debtor’s request, even when the creditor believed the deductions were voluntary.

In Re Raper · filed 1994-12-22(a)(6)

While I accept the Credit Union’s assertion that the payments were accepted under the mistaken impression that the deductions continued voluntarily, I still find the application of the those payments to the debt a technical violation of the stay, specifically § 362(a)(6). The refusal to disgorge the payments upon the debtor’s request is a further violation of the stay.

Section 362(a)(6) does not prohibit the mere accrual of post-petition interest on a nondischargeable debt during bankruptcy.

Leeper v. Pennsylvania Higher Education Assistance Agency · filed 1995-02-27(a)(6)

We conclude that the mere accrual of post-petition interest does not violate the automatic stay.

Section 362(a)(6) does not prohibit unsolicited receipt of a debtor’s voluntary payments under a prison financial responsibility program.

Henry v. United States (In re Henry) · filed 1997-04-28(a)(6)

The court holds that the unsolicited receipt of payments by the United States Department of Health and Human Services under the voluntary inmate financial responsibility program did not violate the automatic stay.

Section 362(a)(3) does not stay postpetition payments for services that were not rendered before the bankruptcy petition.

Deckelbaum v. Cooter, Mangold, Tompert & Chapman, P.L.L.C. · filed 2001-10-04(a)(3)

The Court finds section 362 inapplicable to the instant case. ... Here, the legal fees that Plaintiff seeks to recover were paid several years after Debtor filed for bankruptcy in 1992. Plaintiff does not allege that the fees were payment for prepetition services. Therefore, summary judgment on Count 3 must be denied.

Section 362(a)(6) permits settlement negotiations over a challenge to discharge, but a creditor’s threat to seek revocation of the debtor’s professional license if the challenge fails can be coercive.

Diamond v. Premier Capital, Inc. · filed 2003-10-09(a)(6)

We conclude that the alleged statement could be found coercive, and Diamond could indeed prove a set of facts -- that Premier made the statement and that it coerced Diamond to settle -- that would entitle him to relief.

Section 362(a) bars a creditor from garnishing postpetition wages and obtaining a condemnation order for garnished funds to enforce a prepetition judgment without stay relief.

In Re See · filed 2003-10-28(a)(2), (a)(5)

The Bank’s garnishment of Debtor’s wages post-petition and the condemnation of the garnished funds violated the automatic stay. The Bank was not entitled to receive the funds without relief from the automatic stay.

Section 362(a)(3) and (a)(6) prohibit a creditor from directing the debtor’s customers to pay it to collect prepetition debts and exercise control over estate property.

All Trac Transportation, Inc. v. Transportation Alliance Bank (In Re All Trac Transportation, Inc.) · filed 2004-02-17(a)(3), (a)(6)

TAB -willfully sent the letters to collect and/or recover pre-petition debts in violation of § 362(a)(6). In doing so, TAB also willfully acted to exercise control over property of the bankruptcy estate in violation of § 362(a)(3).

Section 362 bars a secured creditor from directly collecting proceeds owed by a third party to a debtor’s bankruptcy estate without relief from the automatic stay.

In Re Aurora Natural Gas, LLC · filed 2004-07-09(a)(3), (a)(4), (d)

Edge could not, therefore, pursue its security interest directly against Duke without obtaining relief from the automatic stay pursuant to 11 U.S.C. § 362(d). The court has not granted relief to Edge to pursue its security interest in property of the bankruptcy estates. A direct action by Edge to collect from Duke would interfere with the debtors efforts to collect property of the estate, as Edge and the debtors would, in essence, be pursuing Duke for the same collection. Edge cannot interfere with the debtors' pursuit of property of the bankruptcy estates, absent leave of the bankruptcy court.

Section 362(a)(6) prohibits a condominium association from denying a debtor unit owner the right to vote because prepetition condominium fees are unpaid, since that denial pressures payment of the debt.

Gordon Properties, LLC v. First Owners' Ass'n of Forty Six Hundred Condominium, Inc. (In Re Gordon Properties, LLC) · filed 2010-06-02(a)(6)

Denying a condominium unit owner the right to vote at an annual or special meeting because pre-petition condominium fees are past due is similarly prohibited. It pressures a unit owner to pay his past due, pre-petition condominium fees.

Section 362(a)(6) bars a creditor from sending statements and letters to collect prepetition charges, even when the same communications also list postpetition charges.

Mosher v. Evergreen Management, Inc. (In Re Mosher) · filed 2010-06-08(a)(6)

The majority of the amounts listed in the statements and letters sent to Mosher concern post-petition claims. Nevertheless, approximately $620 of the amounts listed do relate to prepetition claims. ... Thus, there is no question as to whether the Defendants violated the automatic stay.

Section 362(a)(6) does not bar a creditor from responding to a debtor’s offer to pay a debt early by suggesting they research whether early payment is possible.

Simms-Wilson v. Blair (In Re Simms-Wilson) · filed 2010-06-03(a)(6)

A debtor may not ask to pay a debt early and then claim that the stay is violated when the creditor (or a representative of the creditor) responds that they should both research the issue.

Section 362 imposes an affirmative duty to immediately cease collection efforts after a bankruptcy filing.

Bererhout v. City of Malden (In Re Bererhout) · filed 2010-06-22(a)

The City’s actions also demonstrate ignorance of the automatic stay and its affirmative duty to immediately cease its collections efforts.

Section 362(a) does not bar a creditor from sending a payoff letter at the debtor’s request when the letter states the amount owed without an attempt to collect it.

Redmond v. Fifth Third Bank · filed 2010-10-20(a)

Payoff letters, however, are not acts of collection and therefore do not constitute violations of the auto- matic stay.

Section 362(a) does not prohibit a creditor from sending a payoff letter at the debtor’s request because the letter is not an act of collection.

Redmond, James A. v. Fifth Third Bank · filed 2010-10-20(a)

Payoff letters, however, are not acts of collection and therefore do not constitute violations of the auto- matic stay.

Section 362(a) requires a creditor with notice of bankruptcy to take reasonable measures within a reasonable time to halt collection proceedings it initiated, even when others conduct the remaining steps.

Hardesty v. Chase (In Re Hardesty) · filed 2010-12-02(a)

For purposes of § 362(a), a creditor, once it receives notice of a debt- or’s bankruptcy, has an affirmative duty to take reasonable measures to ensure that the collection activities, which it set in motion, are discontinued.

Section 362(a) does not bar a creditor from sending requested payoff statements that do not seek payment from the debtor.

Knowles v. Bayview Loan Servicing, LLC (In Re Knowles) · filed 2011-01-03(a)

The Debtor in fact requested the payoff information, and Bayview noted in both statements that it was providing the information pursuant to that request. ... As nothing in the statements can be construed as an attempt by Bayview to seek payment from the Debtor, Bayview’s sending them did not violate the stay.

Section 362(a)(6) does not prohibit a creditor from retaining and applying a debtor’s voluntary postpetition payment from funds outside the bankruptcy estate to a prepetition debt.

Adams v. First Franklin Fin. Corp. (In re Adams) · filed 2018-09-12(a)(6)

First Franklin's retention and application of funds voluntarily paid by the Debtor did not violate the automatic stay. Finding the creditor's actions did would unreasonably limit Code sections allowing a debtor to voluntarily repay a debt with non-bankruptcy estate funds.

Section 362(a)(6) does not bar collection of a debt incurred after the bankruptcy petition from the debtor or the debtor’s own property.

Bell v. Gardner · filed 2018-09-28(a)(6)

Despite the language of the bankruptcy attorney’s letter to the contrary, the automatic stay of “11 U.S.C. § 362(a) does not prohibit a creditor from collecting a postpetition debt from a debtor, or from property of a debtor.”

Section 362(a) keeps the automatic stay in effect during an open bankruptcy case and bars a creditor from independently collecting a judgment absent a further order, even when the judgment is excepted from discharge.

Randy P. Coley - Adversary Proceeding · filed 2019-10-24(a)

Absent a further order, the automatic stay of 11 U.S.C. § 362(a) remains in effect and DIRECTV is not permitted to pursue collection of the Judgment balance independently of the Trustee while the Bankruptcy Case remains open.

Section 362(a)(6) does not prohibit a freeze of claimed tax refunds when, in context, the freeze is not an act to collect, assess, or recover a claim against the debtor.

In Re: Waters · filed 2022-11-21(a)(6)

The IRS’s administrative freeze also did not violate Section 362(a)(6) because, on the facts of this case, the freeze did not constitute an act to collect, assess, or recover a claim against Waters.

Section 362(g)(2) requires the debtor to prove that property is necessary to an effective reorganization when opposing relief from the automatic stay.

Farina v. Ford Motor Credit Co. (In Re Farina) · filed 1981-02-27(g)(2)

In addition, the Debtor has failed to prove, as he must, under Section 362(g)(2), that either the “ownership” or “use” of the tractor is necessary to his effective reorganization.

A creditor seeking relief from the stay under § 362(d)(1) for lack of adequate protection bears the initial burden of proving that lack.

Associates Commercial Corp. v. a & a Transport, Inc. (In Re a & a Transport, Inc.) · filed 1981-05-08(d)(1)

If a creditor sues for relief under § 362(d)(1), he has the burden of proving the lack of adequate protection, for that is the principal allegation of the complaint.

Section 362 permits relief from the automatic stay to recover premises when the debtor’s lease was terminated before bankruptcy and the debtor has no remaining interest in the premises.

Tenent v. Tenfield, Inc. (In Re Tenfield, Inc.) · filed 1981-05-20(d)(1)

The Court finds that at the time of the filing of the Chapter 11 petition, the sublease of Tenfield, Inc. from Tenent had been terminated by the action of Dunstan in the state court proceeding in Henrico County, Virginia. At that point, Tenfield, Inc. had no interest in the demised premises. ... The court concluded that adequate cause existed to lift the stay on the ground that Mimi’s of Atlanta, Inc., as debtor in possession, held no rights under § 365 of the Code which could be assumed. The court further held that the alternative prayer for relief in the form of possession of the premises may also be granted. This Court finds that analysis persuasive. There is, therefore, no executo-ry interest available for Tenfield, Inc. to assume.

Section 362(d)(1) does not treat an excusable delay in making chapter 13 plan payments, standing alone, as cause to modify the automatic stay.

Commonwealth of Penna. School Employes' Retirement Fund v. Davis (In Re Davis) · filed 1981-06-12(d)(1)

As a result of the foregoing facts we conclude that the failure of the debtors to make the payments offered in their plan is excusable and does not, standing alone, constitute “cause” to modify the automatic stay.

A proposed payment plan combined with an equity cushion can adequately protect a mortgagee and support continuation of the automatic stay.

Provident Savings Ass'n v. Pannell (In Re Pannell) · filed 1981-06-15(d)(1)

The aforesaid proposed payment plan, along with the existence of an equity cushion, is conclusive evidence that the mortgagee’s interest is adequately protected.

Section 362 allows the automatic stay to remain in place when the creditor is adequately protected and the property is necessary for a successful reorganization.

Charnes v. Keyport Summit, Inc. (In re Keyport Summit, Inc.) · filed 1981-06-24(d)

The automatic stay need not be modified at such time as the creditor is adequately protected and the property is necessary for a successful reorganization of the Debtor.

Section 362(d) permits modification of the automatic stay when a secured creditor lacks adequate protection and the debtor cannot show a reasonable possibility of effective reorganization.

Southeast First National Bank of Miami v. Sundale Associates, Ltd. (In Re Sundale Associates, Ltd.) · filed 1981-06-29(d)(1), (d)(2)

On the record presented, this Court must find and conclude that the Debtors have no equity in the Property and that Southeast, as holder of mortgages with interest accruing daily at a substantial rate, is not receiving adequate protection. In addition, the Debtors’ attempt to show that an effective reorganization is reasonably possible is unpersuasive. ... In view of the Debtors’ manifest failure to discharge their statutory burden, this Court will modify the automatic stay to afford Southeast the relief mandated by the Code.

Section 362(d)(1) permits relief from the automatic stay for cause when a debtor materially defaults on a confirmed plan without adequate justification.

Matter of Quinlan · filed 1981-07-13(d)(1)

A material default by the debtor as to a term of a confirmed plan may in some cases constitute “cause” for the lifting of the stay pursuant to 11 U.S.C. § 362(d)(1). This is such a case.

Section 362(d)(2) permits relief from the automatic stay only when the debtor lacks equity in the property and the property is unnecessary to an effective reorganization.

Provident Bank v. BBT (In Re BBT) · filed 1981-07-25(d)(2)

11 U.S.C. § 362(d)(2) is in the conjunctive. Lack of value equity [plaintiff’s only burden of proof 11 U.S.C. § 362(g)(1)] is conceded here, but that does not alone suffice for lifting the stay. There must also be a failure by defendant to show that the property is necessary to an effective reorganization.

Section 362(g) places the burden of proving the debtor’s equity in property on the party seeking relief from the automatic stay.

Miners National Bank of Pottsville v. Schramm (In Re Schramm) · filed 1981-07-24(g)

When relief is sought under Section 362(d), the party seeking relief from the stay has the burden of proof on the issue of debtors’ equity in the property, but the party objecting to the relief has the burden on all other issues. 11 U.S.C. § 362(g) (1979). ... We conclude that the Bank has not met its burden of proving that debtors lack equity in the property, and we therefore deny the Bank’s application to modify the stay.

Section 362(d) does not require relief from the stay for a fully secured creditor when payments maintain its secured position and the debtor adequately assures that position will not erode.

Riva Equipment Corp. v. Wheeler (In Re Wheeler) · filed 1981-07-29(d)

Therefore, so long as the debtor can provide adequate assurance that Riva’s position will erode no further, and since Riva’s position seems to have been maintained with the monthly payments, Riva is not now entitled to relief from stay under § 362(d).

Section 362 permits relief from the automatic stay based on the creditor’s protection, the debtor’s equity in the collateral, and whether the property is necessary for an effective reorganization.

Worcester County National Bank v. Xinde International, Inc. (In Re Xinde International, Inc.) · filed 1981-08-05(d)

The validly secured creditor in this case has adequate protection in that its $147,000 lien is fully secured by the value of $216,000 of the manufacturing equipment, and, is further protected by an equity cushion. The equipment is necessary for an effective reorganization of the debtor’s affairs. Therefore the plaintiff is not entitled to relief from stay at this time.

Section 362(d)(1) permits modification of the automatic stay for cause, including to allow a dispute between third parties to proceed when doing so will not disrupt distribution of estate assets.

Manchem, Inc. v. Greene (In re Columbia Ribbon & Carbon Manufacturing Co.) · filed 1981-08-11(d)(1)

Clearly, the grounds set forth for relief from stay in § 362(d)(1) of the Bankruptcy Code are not exclusive. ... The instant action is no more than a dispute between third parties and only incidentally involves the debtor, as an alleged bailee of the goods in issue. The resolution of this issue will in no way frustrate the orderly distribution of the assets of the estate.

Section 362(d)(2) counts a debtor’s beneficial equity in real property held through a land trust when deciding whether to lift the automatic stay.

Elgin State Bank v. Cowsert (In Re Cowsert) · filed 1981-08-14(d)(2)

Therefore this court concludes that, for purposes of applying § 362(d)(2), it should consider the debtors’ “beneficial equity” in the real property.

Relief from the automatic stay will not be made retroactive to compensate a creditor for harm caused by its own delay in seeking relief.

Twin City Federal Savings & Loan Ass'n v. Salmons (In re Salmons) · filed 1981-08-26

Where a creditor, through its own inaction, is prevented from going forward, the Court will not relieve it of its burden retroactively. It is the creditor’s delay which caused any damage not the automatic stay.

Section 362(g) places the burden of proving adequate protection on the party opposing relief from the automatic stay.

Walter E. Heller & Co. Southeast v. Lackow Bros., Inc. (In Re Lackow Bros., Inc.) · filed 1981-10-06(g)

The Co-Trustees, as the party opposing relief from stay, have the burden of proving that Heller is adequately protected.

Section 362(d) allows the court to consider the validity of a creditor’s claim when deciding whether to grant relief from the automatic stay.

Turismo v. Barr (In Re Lockwood) · filed 1981-09-21(d)

When a party seeks relief from the stay, the validity of his claim is always a proper matter to be heard and considered in determining whether such relief should be granted.

Section 362(d)(1) permits relief from the automatic stay for cause when a Chapter 11 petition was filed without good faith.

Polkin, Inc. v. Lotus Investments, Inc. (In Re Lotus Investments, Inc.) · filed 1981-10-19(d)(1)

While § 362(d)(1) does not specifically incorporate § 1112(b), it is reasonable to conclude that a creditor should be granted relief from the stay if the case is one which the court should dismiss if a motion to dismiss under § 1112(b) were presented.

Section 362(d) permits relief from the automatic stay when the debtor lacks equity in the property and fails to provide the secured creditor adequate protection.

First Federal Savings and Loan Ass'n v. Ruane (In re Ruane) · filed 1981-10-20(d)(1), (d)(2)

The issue presented is whether the plaintiff is entitled to relief from the automatic stay provisions of § 362(a) of the Bankruptcy Code (“the Code”) to permit it to proceed with mortgage foreclosure against the residence of the defendants/debtors. We conclude that the plaintiff is entitled to the requested relief because the debtors lack equity in their property and because the debtors have failed to provide the plaintiff with adequate protection of its interest in their property.

Relief from the automatic stay under § 362(d)(2)(B) may be denied when the creditor fails to show that the property lacks equity and is unnecessary to an effective reorganization.

Pierce v. Hurricane Resort Co. (In Re Hurricane Resort Co.) · filed 1981-10-22(d)(2)(B)

4. That the Plaintiff, Charles W. Pierce, has failed to show that there is no equity in the property for the benefit of the Debtor and the other creditors of this estate, and that said property is not necessary to an effective reorganization proceedings pursuant to Section 362(d)(2)(B) of the Bankruptcy Code.

A complaint seeking relief from the automatic stay for cause under § 362(d)(1) needs no specific wording if it gives the debtor notice of the asserted ground, including lack of adequate protection.

Matter of Green Tie Realty Corp. · filed 1981-10-30(d)(1)

No specific language is required in the complaint so long as the adverse party is put on notice that a request for relief is sought on one of the grounds delineated under Code § 362(d). ... The complaint sufficiently apprises the debtor that the landlord seeks relief from the automatic stay under Code § 362(d)(1) for cause, including the lack of adequate protection of its interest in the property in question.

A debtor’s bad-faith bankruptcy filing constitutes cause to lift the automatic stay under § 362(d)(1).

Schmidt Industries, Inc. v. Schreiber (In Re Schreiber) · filed 1981-11-02(d)(1)

Based upon the foregoing, the Court concludes the Debtor’s actions constitute bad faith, which bad faith constitutes adequate cause pursuant to 11 U.S.C. § 362(d)(1) to warrant the lifting of the automatic stay herein.

Section 362(d) requires provision to cure defaults and protect creditors’ interests when relief from the automatic stay is denied.

General Data Corp. v. Phelia Associates, Inc. (In Re Phelia Associates, Inc.) · filed 1981-11-16(d)

Both law and equity would require that, if relief from the automatic stay is to be denied, provision must be made to cure the defaults and to protect fully the interests of the respective plaintiffs.

Section 362(g) places the burden on the debtor to show that property is necessary to an effective reorganization once the moving party shows the debtor has no equity in it.

Harsh Investment Corp. v. Bialac (In Re Bialac) · filed 1981-11-18(g)

Once the moving party has demonstrated that there is no equity in the property the burden of showing the necessity of the property to an effective reorganization shifts to the debtor. 11 U.S.C. § 362(g).

Section 362(d) authorizes relief from the automatic stay for cause, and § 362(g) places the burden of proof on cause on the party opposing relief.

In Re Sentinel Bonding Agency, Inc. · filed 1981-11-20(d), (g)

11 U.S.C. § 362(d) requires a bankruptcy court to grant a requesting party (Surety) relief from the stay “for cause,” and § 362(g) places the burden of proof, as to the issue of cause, upon the party opposing such relief (Sentinel).

Section 362(d)(1) does not entitle a secured creditor to relief from the automatic stay merely because it holds a valid security interest.

General Motors Acceptance Corp. v. Abel (In Re Abel) · filed 1981-12-04(d)(1)

In effect, a secured party would need prove only that it possessed a valid security interest in the property, and it would then be entitled to relief from the stay. Not only would such an interpretation emasculate one of the bankrupt’s fundamental protections, it would have the practical effect of reading section 362(a)(5) out of the Bankruptcy Code. Congress could not have intended such an expansive reading of 11 U.S.C. § 362(d).

Section 362(d) requires a creditor seeking relief from the automatic stay to allege grounds for relief under that subsection; merely stating its claim and its retention of a debtor’s tax refund is insufficient.

United States Ex Rel. Internal Revenue Service v. Norton (In Re Norton) · filed 1981-12-04(d)

We conclude that the IRS has failed to state a cause of action for relief from the stay based on any of the grounds stated in § 362(d) of the Code.

Section 362(d) does not entitle a creditor to relief from the automatic stay to reclaim property when its security interest was unperfected at the bankruptcy filing and subordinate to the trustee’s interest as a hypothetical judicial lien creditor.

First National Bank of Denver v. Turley (In Re Turley) · filed 1981-12-15(d)

This Bankruptcy Court holds Creditor is not entitled to relief from the automatic stay to reclaim the mobile home because Creditor had an unperfected security interest at the time of filing bankruptcy which does not defeat Trustee’s interest as a hypothetical judicial lien creditor.

In Chapter 7, § 362(d)(2) requires relief from the automatic stay when the debtor has no equity in the property, because effective reorganization is irrelevant.

Ramco Industries v. Preuss (In Re Preuss) · filed 1981-12-16(d)(2)

Relief from the automatic stay is governed by 11 U.S.C. § 362(d). Relief must be granted if the debtor has no equity in the property, and the property is not necessary to an effective reorganization. 11 U.S.C. § 362(d)(2). Since reorganization is not relevant in Chapter 7, the only issue is whether there is equity in the property.

Section 362(d)(2) does not permit lifting the stay when the debtor has equity in the property and needs it for an effective reorganization.

Southeast First National Bank of Miami v. Charles McArthur Dairies, Inc. (In Re Charles McArthur Dairies, Inc.) · filed 1981-12-22(d)(2)

With respect to the second basis for relief under § 362(d), the Court concludes that the Debtor does have an equity in the trust account funds and that these funds are essential to an effective reorganization of the Debtor. Accordingly, Plaintiffs failed to establish the requirements to have the stay lifted pursuant to 11 U.S.C. § 362(d)(2).

Section 362(d) permits relief from the automatic stay when the debtor has no equity in the property at issue.

Lischka v. Vienna International Corp. (In Re Vienna International Corp.) · filed 1982-01-04(d)

Plaintiff is entitled to relief from automatic stay as provided in § 362(a) if he can show that the Debtor does not have any equity in the fire insurance proceeds.

Section 362(d)(1) permits relief from the automatic stay for cause when a Chapter 11 petition was filed in bad faith, regardless of whether the creditor has adequate protection.

Yaffe v. Andrews (In Re Andrews) · filed 1982-01-05(d)(1)

“Good faith” is an implicit prerequisite to the filing or continuation of a proceeding under Chapter 11 of the Code. Accordingly, the debtor’s lack of “good faith” in filing a case under Chapter 11 is “cause”, independent of the existence or lack of adequate protection, to vacate the automatic stay under § 362(d)(1).

Section 362(d)(2) permits relief from the automatic stay based on lack of equity only when the creditor proves the debtor lacks equity and the property is not necessary to an effective reorganization.

Mil-Ger Enterprises v. Moody (In re Moody) · filed 1982-01-21(d)(2)

The Court, therefore, concludes that Plaintiff has failed to carry its burden regarding Debtors’ lack of equity in the subject property and that Debtors have established that the subject property is necessary to effect their plan.

Section 362(d) allows the stay to remain in place when the creditor’s lien is adequately protected and equity exists in the property.

Rebco Towing Co. v. River Line, Inc. (In Re River Line, Inc.) · filed 1982-01-27(d)

Under these circumstances, the court finds that Rebco’s lien on the vessel is adequately protected. Furthermore, since Rebeo has not proven the validity of any other outstanding claims against the M/V Celeste Campbell, the court concludes that equity exists in the property. Accordingly, both Rebco’s complaint for relief from the stay and the defendants’ request for modification of the stay pursuant to 11 U.S.C. § 362(d) are denied.

Section 362(d) permits unsecured creditors to seek relief from the automatic stay because its party-in-interest provision is not limited to secured creditors.

In the Matter of Charles Holtkamp and Holtkamp Farms, Inc., Debtors-Appellants. Charles Holtkamp and Holtkamp Farms, Inc · filed 1982-02-01(d)

Holtkamp’s contention that § 362(d) applies only to secured creditors is not supported by the statutory language or case-law. Subsection (d) grants relief from the automatic stay, under certain conditions, to “a party in interest.” Had Congress intended the section to apply only to secured creditors, it undoubtedly would have so stated.

A request to lift the automatic stay under § 362 must be explicit and state its grounds; a request hidden in the prayer of an answer does not lift the stay by operation of law.

Stonitsch v. Commerce Bank of Kansas City (In Re Amco Products, Inc.) · filed 1982-02-19

The defendant’s request was found in the prayer of its answer. A request for lifting of the automatic stay under 11 U.S.C. § 362 must be explicit, not camouflaged in the body of a party’s prayer. Further, no specific grounds were enumerated in the pleading in regard to such request. The automatic stay was not lifted by operation of law, based on the manner in which the relief was requested.

Section 362(d)(1) does not treat mere delay in asserting rights as cause for relief from the automatic stay when the delay entails no demonstrable economic loss.

Prudential Insurance Co. of America v. Madison Hotel Associates (In Re Madison Hotel Associates) · filed 1982-03-05(d)(1)

Upon a review of the authorities cited in the various briefs of counsel and upon the representations of counsel at the pretrial conference, I am satisfied that relief from the automatic stay for “cause” is not, nor was it intended by the drafters of the Bankruptcy Code, to encompass mere delay in the assertion of rights where that delay is not accompanied by demonstrable economic loss.

A lien creditor must satisfy the procedures and standards for relief from the automatic stay before executing against property held by a debtor as tenant by the entireties; an answer to a lien avoidance application is insufficient.

In Re Buckwalter · filed 1982-03-15(a)

We believe that an answer to an application to avoid liens is not the proper pleading in which to assert their claimed right to enforce their lien. The Bank may wish to file a complaint to seek relief from the automatic stay. We cannot, however, allow the Bank to proceed with its execution without complying with the statutorily mandated procedures and standards for relief from the stay.

Section 362(d) does not warrant modifying the automatic stay when the creditor shows no depreciation or other prejudice from the stay and the debtors have equity in the property.

Lafayette Trust Bank v. Cressman (In re Cressman) · filed 1982-03-19(d)

The Bank has not demonstrated that its interest in the subject property is being detrimentally affected during the pendency of the stay. There is no evidence before us upon which to conclude that the value of the real estate is depreciating. As the Bank has the first mortgage position, it is not being prejudiced by the stay. We have determined that the debtors have equity in the property as a result of our decision that the Bank’s judgment notes are avoidable. For these reasons, we will dismiss the Bank’s complaint to modify the stay.

Section 362(d)(2) requires a showing that the debtor has no equity in the property before the automatic stay can be lifted on that ground.

Moxley v. Comer (In Re Comer) · filed 1982-03-30(d)(2)

We find also that the requirements of section 362(d)(2) have not been met. The primary requirement is a showing that the debtors have no equity in the property. The Moxleys failed to meet that requirement; there is substantial equity. The automatic stay will not be lifted or modified.

Section 362(d) does not permit relief from the automatic stay merely to let a creditor pursue a collection judgment and execute against property held by the entireties without alleging cause to modify the stay.

Shope v. Buckwalter (In re Buckwalter) · filed 1982-03-31(d)

The complaint does not allege such cause as would persuade us to modify the stay under § 362(d). The expressed intent of the creditor-plaintiff is to engage in a collection action in direct contravention of the spirit and the letter of the Bankruptcy Code.

Section 362(d)(2) does not permit relief from the automatic stay based solely on a debtor’s lack of equity when the property is necessary to an effective reorganization.

LHD Realty Corp. v. Metropolitan Life Insurance Co. (In Re LHD Realty Corp.) · filed 1982-04-01(d)(2)

As to the issue of whether LHD has any equity in the property, it is clear at this point in time that it does not. The court does, however, find that the property is necessary to an effective reorganization. Lack of equity, alone, therefore, will not serve to afford Metropolitan relief from stay.

Section 362(d) permits relief from the automatic stay when a creditor alleges lack of adequate protection or facts showing that the debtor lacks equity and the property is unnecessary to an effective reorganization, if those facts are proven.

Hamilton Bank v. Fidelity Electric Co. (In Re Fidelity Electric Co.) · filed 1982-04-19(d)

The complaints before us plead facts which constitute the elements necessary for relief under 11 U.S.C. § 362. ... They allege lack of adequate protection of the creditors’ interest, lack of equity of the debtor, and lack of feasible reorganization prospects. If the facts upon which Central and the Bank rely are proven, they would be entitled to the relief sought in the complaints.

Section 362(d)(1) permits relief from the automatic stay for cause when maintaining the collateral would only prolong a debtor’s attempt to confirm a plan that cannot comply with Chapter 11.

In Re Pine Lake Village Apartment Co. · filed 1982-04-23(d)(1)

Indeed, the debtor’s lack of equity in this estate and its unattainable objective under Chapter 11 constitute sufficient cause for granting the mortgagee’s request for relief from the stay in accordance with 11 U.S.C. § 362(d)(1).

Section 362(d) does not entitle a secured creditor to relief from the automatic stay when the debtor has equity in the collateral and the creditor is adequately protected.

General Electric Credit Corp. v. QPL Components, Inc. (In Re QPL Components, Inc.) · filed 1982-05-03(d)

Having established the debtor’s equity at $130,000, and noting the adequate assurance order signed February 9, 1982, wherein GECC receives 75% of all accounts receivable derived from sale of the collateral, and an 11 U.S.C. § 507(b) priority for the balance, it is readily apparent that GECC would not have been entitled to relief under § 362(d).

A debtor’s partners’ proposed capital contribution does not prevent relief from the automatic stay when the mortgagee’s secured claim remains at risk.

In Re Pine Lake Village Apartment Co. · filed 1982-05-04

To say that the debtor’s general and limited partners relinquish their interests under the alternative plan and that they will only hold interests to the extent of their pro rata portion of the $700,000 they propose to contribute to the debtor, does not detract from the mortgagee’s right to relief from the stay. Indeed, this argument is tantamount to saying that the partners have no present interest in the property but they should nevertheless be permitted to hold off the mortgagee who holds claims totalling nearly $14,000,000, of which $6,400,000 is secured and at risk. To state the issue is to answer it.

Section 362(d)(1) permits relief from the automatic stay for cause when a creditor’s interest in property lacks adequate protection; a debtor’s inability to make payments or reach a reaffirmation agreement may also establish cause.

In re Gambler · filed 1982-05-19(d)(1)

Relief from the automatic stay may be granted “for cause, including the lack of adequate protection of an interest in property” 11 U.S.C. § 362(d)(1). ... In addition, cause to lift the stay is also established by the evident inability of the Gamblers to make any payments on the debt or to reach a reaffirmation agreement.

Section 362 permits the court to continue the automatic stay briefly before lifting it to allow a lessor to repossess property following rejection of a lease.

Motor Truck & Trailer Co. v. Berkshire Chemical Haulers, Inc. (In Re Berkshire Chemical Haulers, Inc.) · filed 1982-05-28

However, recognizing that the debtor needs replacement vehicles to continue its operation, I shall continue the automatic stay in effect for ten (10) days from the date of this order, so that the debtor might seek alternative leasing arrangements. At the close of business on the tenth day after the date of this order, the debtor’s lease shall be deemed terminated, the automatic stay deemed lifted as to Motor Truck, and the debtor shall make available at its principal place of business the vehicles currently in its possession, so that Motor Truck might take possession of the same.

Section 362(d) requires a creditor seeking relief from the automatic stay to show inadequate protection or lack of debtor equity in the property.

Scottsdale Associates, Inc. v. Seatrain Lines, Inc. (In Re Seatrain Lines, Inc.) · filed 1982-06-04(d)

A creditor must show either lack of adequate protection or lack of debtor equity in the property in question. In the present case, Scottsdale put into issue Seatrain’s equity in the New Jersey property. This court denies the relief requested by Scottsdale because it finds that the debtor does, in fact, have an equity interest in the New Jersey property in that the relationship between Scottsdale and Seatrain is one of equitable mortgagee-mortgagor, not lessor-lessee.

Section 362(d)(1) permits relief from the automatic stay for cause when continued protection would shield violation of a prepetition injunction and leave the protected property right without adequate protection.

In re Cinnabar 2000 Haircutters, Inc. · filed 1982-06-04(d)(1)

Code § 362(d)(1) provides that a party in interest may request that the automatic stay be lifted for cause, including the lack of adequate protection of an interest in property of such party in interest. Moreover, Code § 362(g) declares that the debtor has the burden of proof on all issues to sustain the automatic stay, except the debt- or’s equity in property. In this case, the plaintiff has established a judicially-determined property right in the name “Cinnabar” as well as a finding by the District Court that the debtor’s continued use of such name is in contempt of the prepetition judgment of injunction. The debtor has not offered anything that would adequately protect the plaintiff’s right to prevent a dilution of its tradename.

Section 362(d) does not authorize relief from the automatic stay for a mortgagee when the debtor has equity in the property and adequately protects the mortgagee’s interest through continued periodic payments.

Federal National Mortgage Ass'n v. Riggins (In Re Riggins) · filed 1982-06-07(d)

We conclude that the mortgagee is not entitled to such relief pursuant to § 362(d) because we find that the debtor has an equity in the property and that the interest of the mortgagee is adequately protected by the debtor’s continued periodic payments to the mortgagee, directly and through her chapter 13 plan.

Section 362(d)(2) permits relief from the automatic stay when the debtor appears to have no property interest or equity in the property at issue.

Allsop v. Ernst (In Re Roudebush) · filed 1982-06-09(d)(2)

IT IS FURTHER ORDERED that Plaintiff is granted relief from the automatic stay of 11 U.S.C. § 362 to proceed with his suit in the Common Pleas Court of Montgomery County, Ohio for purpose of seeking the return of the diamond, since Debtor appears to have no property interest or equity in the diamond.

A debtor’s equity in collateral and its necessity for an effective reorganization support denying relief from the automatic stay.

Rhode Island Hospital Trust National Bank v. Elliott Leases Cars, Inc. (In Re Elliott Leases Cars, Inc.) · filed 1982-06-11(d)(2)

Since the Debtor has equity in the 35 vehicles in question, and has shown that said collateral is necessary for an effective reorganization, the Bank’s motion for relief from the automatic stay is denied.

Section 362 permits the automatic stay to be lifted as to creditors seeking to proceed against property in which neither the debtors nor their estate has an interest.

Gaynes v. Freeman (In re Gaynes) · filed 1982-06-15

The restraining order entered May 4, 1981 enjoining the Investors and Desert Knight from proceeding against the real estate is hereby dissolved because the Gaynes concede that neither the Gaynes nor their debtors’ estate has any interest or rights therein. The statutory stay of proceedings pursuant to 11 U.S.C. § 362 is also lifted as against the Investors and Desert Knight.

A lien creditor is a party in interest with standing to seek relief from the automatic stay under § 362(d).

Bache Halsey Stuart Shields, Inc. v. K & H Enterprises, Ltd. (In re K & H Enterprises, Ltd.) · filed 1982-06-16(d)

Bache became a lien creditor of K & H as of November 6,1981, and as such is a “party in interest” with standing to seek a relief from the automatic stay pursuant to 11 U.S.C. § 362(d).

Section 362 permits the stay to be lifted so a secured creditor can sell collateral when the debtor cannot adequately protect the creditor’s interest.

Day Resource & Development Co. v. First Interstate Bank of Idaho, N. A. (In Re Day Resource & Development Co.) · filed 1982-06-17

I thus conclude that Day Resource and IFSL are incapable of providing adequate protection to the bank which would sustain a return of the collateral. Furthermore, in regard to the actions brought by the bank seeking relief from the stay in order to complete the sale of the collateral and apply of the proceeds to its debt, I find that the bank is entitled to a vacation of the section 362 stay for these purposes.

In a Chapter 7 case, cause presumptively exists to grant relief from the automatic stay against setoff.

Matter of Springfield Casket Co., Inc. · filed 1982-06-24(a)(7)

In cases under 11 U.S.C. Chapter 7, such as the case at bar, it is the opinion of the Court that “cause” presumptively exists to grant relief from 11 U.S.C. § 362(a)(7).

Section 362(d)(1) permits relief from the automatic stay for cause when an unconfirmed Chapter 13 plan indefinitely delays payment of alimony and child support.

Sak v. Sak (In Re Sak) · filed 1982-06-29(d)(1)

To force the plaintiff to wait such an indefinite period to receive that which was ordered for her and her children’s survival while the debtor tortuously maneuvers a plan into confirmable form is obviously an intolerable situation and is clearly sufficient cause to vacate the automatic stay.

Section 362(d) permits relief from the automatic stay to allow foreclosure when the mortgagee’s interest is inadequately protected.

Merchants & Mechanics Federal Savings & Loan Ass'n v. Lewis (In re Lewis) · filed 1982-06-30(d)

It is further finding of the Court that the mortgagee's interest is inadequately protected, ... IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that Merchants and Mechanics Federal Savings and Loan Association is granted relief under 11 U.S.C. §§ 362(d) and 1301(c)(3) to proceed with the foreclosure suit now pending in the Common Pleas Court of Greene County (Ohio).

Section 362’s automatic stay must be lifted as to real property when the debtor’s lease-option is void and gives the bankruptcy estate no interest in that property.

Gilbert v. Shape (In Re Shape) · filed 1982-07-11

I feel that this “lease-option” as it applies to the real property in question, is void, and therefore not an asset of this estate. That the stay imposed by 11 U.S.C. § 362 as to any such property must therefore be lifted and terminated, but under the terms and conditions, as follows: ... 1. That the automatic stay imposed by 11 U.S.C. § 362 shall be lifted and cancelled on August 21, 1982, and that defendants have until that date to vacate the real estate involved.

Section 362 does not permit relief from the automatic stay to enforce a setoff when the creditor has no right of setoff.

United States Ex Rel. Internal Revenue Service v. Hammett (In Re Hammett) · filed 1982-07-27(d)(1)

If no right of setoff exists, there would be no basis for the Court to lift the automatic stay.

Section 362 permits relief from the automatic stay to allow eviction when the debtor’s lease terminated before the bankruptcy petition.

Bucknell Leasing Corp. v. Darwin (In Re Darwin) · filed 1982-07-29(d)

This court holds that the facts present in this case justify a finding that at the time the debtor filed his petition for relief under Chapter 13, his lease had terminated, he had no rights thereunder, and the landlord, who has come into this court to oust him from possession, is entitled to have the automatic stay lifted so as to proceed to enforce its rights and remedies.

Section 362(d) does not entitle an unsecured creditor to relief from the automatic stay to repossess goods in which it lacks a superior interest.

Sino-American Economic Development Corp. v. Plad, Inc. (In re Plad, Inc.) · filed 1982-08-11(d)

Sino-American is thus an unsecured creditor of the debtor and not entitled to relief from the stay.

Section 362(d) permits relief from the automatic stay for cause beyond lack of adequate protection, including limited proceedings to determine liability without collecting the debt.

Hinders v. Miami Valley Regional Transit Authority (In Re Hinders) · filed 1982-08-23(d)

The statute very explicitly provides additional discretion to the Bankruptcy Court to grant relief “for cause, including the lack of adequate protection ...” ... Accordingly, Plaintiff must be granted relief from the stay to proceed in state court for the sole purpose of obtaining a finding of liability only, and not for any purpose or act to collect, recover or offset any such debt as a personal liability of the debtor or from property of the debtor, whether or not discharge of such debt is waived.

A § 362(d) stay relief proceeding does not decide whether a transfer was fraudulent, and an avoidance claim is not a proper issue in that proceeding.

Coleman v. Home Savings Ass'n (In Re Coleman) · filed 1982-07-15(d)

Further an action pursuant to § 362(d) does not raise the issue of fraudulent transfer in and of itself. An action to avoid a fraudulent transfer is simply not a proper issue in a § 362 complaint. For these reasons this court is not willing to consider res judicata as a defense to the present suit.

Section 362(d) permits denial of stay relief when the creditor is adequately protected and the debtor has substantial equity in property necessary to an effective reorganization.

Matter of Levinsky · filed 1982-09-22(d)

I also deny that part of the Bank’s motion which requests relief from the automatic stay pursuant to section 362(d) of the Code, 11 U.S.C. § 362(d). ... It is apparent to me, for the purpose of this motion, that (1) the Bank is adequately protected; (2) the debtor has a substantial equity in the property, and (3) it is necessary to an effective reorganization.

Section 362(d) allows relief from the automatic stay when the debtor cannot cure defaults and fully protect the affected creditors’ interests.

General Data Corp. v. Phelia Associates, Inc. (In Re Phelia Associates, Inc.) · filed 1982-09-30(d)

Both law and equity would require that, if relief from the automatic stay is to be denied, provision must be made to cure the defaults and to protect fully the interests of the respective plaintiffs.

Section 362(d) requires a party seeking relief from the automatic stay to establish cause.

Ohio, Ohio Student Loan Commission v. Willis (In Re Willis) · filed 1982-10-04(d)

IT IS FURTHER ORDERED, ADJUDGED AND DECREED that Plaintiff’s request for relief from the automatic stay of 11 U.S.C. § 362 is DENIED for failure to establish cause under 11 U.S.C. § 362(d).

A substantial mortgage arrearage and no direct mortgage payments after a Chapter 13 filing constitute cause for relief from the automatic stay under § 362(d)(1).

Federal National Mortgage Ass'n v. Moore (In Re Shahid) · filed 1982-10-26(d)(1)

Nevertheless, in view of the size of the arrearage which debtor has permitted to accumulate, and in view of the fact that debtor has made no ... payment whatsoever directly to plaintiff since the filing of the Chapter 13 petition, cause exists for granting relief from the automatic stay. Therefore, pursuant to 11 U.S.C. § 362(d)(1), plaintiff is granted the relief prayed for in the Complaint.

Section 362 allows relief from the automatic stay so a bank may set off remaining deposit funds against a pre-petition debt when its setoff right is preserved.

Commerce Union Bank v. Welch (In Re Welch) · filed 1982-10-28

The court will further order that Commerce Union shall be granted relief from the stay to setoff the remaining funds in the debtor’s account in satisfaction of pre-petition debt.

A bankruptcy court may modify the Section 362 stay to validate a sheriff’s sale and distribution of the sale proceeds when it denies confirmation of a Chapter 13 plan.

Lomas & Nettleton Co. v. Smith (In Re Smith) · filed 1982-11-03

ORDERED, ADJUDGED AND DECREED that the proposed Chapter 13 Plan should be, and is hereby denied and the Section 362 stay modified to validate the Sheriff’s sale and distribution of the sale proceeds.

Section 362(d)(1) provides no cause to lift the automatic stay when debtors keep their secured loan payments and collateral insurance current and the creditor receives the benefit of its bargain.

Riggs National Bank v. Perry (In Re Perry) · filed 1982-11-16(d)(1)

For these reasons, there exists no cause to lift the stay imposed by 11 U.S.C. § 362(a). The creditor is receiving the benefit of its bargain in both cases so long as the debtors are making the payments and maintaining insurance on the collateral as required by the contracts. Absent mere speculation, there is no evidence before the Court to suggest a contrary conclusion.

Section 362(d) permits relief from the automatic stay to let a creditor apply accounts covered by its perfected security interest to the debtor’s outstanding debt.

John Deere Industrial Equipment Co. v. Southern Equipment Sales Co. (In Re Southern Equipment Sales Co.) · filed 1982-11-23(d)

Thus, John Deere had a perfected security interest in the dealer reserve account and contingent earnings account and is entitled to relief from the automatic stay to apply those accounts to the sums owed to it from the debtor.

Section 362(d) permits relief from the automatic stay for cause; the court may deny relief when separate litigation would burden the debtor and trying liability and dischargeability together would conserve resources.

Wenzoski v. Palmer (In re Palmer) · filed 1982-11-23(d)

Economy of judicial effort and expense to the parties would be served by trying both issues of liability and dischargeability in this court. ... The court finds that the plaintiffs have failed to show cause for relief from the stay provided by 11 U.S.C. § 362. An order will be entered herein denying such relief.

Section 362(d) permits the stay to be lifted as to collateral when the debtor offers no evidence that it is necessary to an effective reorganization or that the creditor’s interest is adequately protected.

Ever Ready MacHinists, Inc. v. Relpak Corp. (In Re Relpak Corp.) · filed 1982-11-24(d)

Since Relpak has offered no evidence that the equipment covered by Purchase Agreement 6 is necessary to an effective reorganization, or that adequate protection exists as to Ever Ready’s interest in such equipment, the stay will be lifted as to such equipment. 11 U.S.C. § 362(d).

Section 362(d) provides no basis for relief from the automatic stay to foreclose a mortgage when the claims it secures have been satisfied and discharged.

Balbirer v. Austin (In Re Austin) · filed 1982-11-29(d)

Because those claims are satisfied and discharged, B.J. Apparel has no cause of action on the mortgage and no basis for relief from the stay.

Section 362(d) relief is unavailable to a lessor of an unexpired lease before a Chapter 11 debtor has had a reasonable opportunity to assume or reject the lease.

Bistrian v. Easthampton Sand & Gravel Co. (In Re Easthampton Sand & Gravel Co.) · filed 1982-12-02(d)

Prior to the debtor’s election, the exercise of creditors’ rights under § 362(d) are preempted.

Section 362 relief from the automatic stay is warranted when rejection of a lease and purchase option removes the property interests from the debtor’s estate.

Matter of Northwood Industries, Inc. · filed 1982-12-03

The option and the lease would therefore pass out of the debtor’s estate and the stay against any action by Glover to foreclose upon or recover the real estate would be terminated.

Section 362(d)(1) permits modification of the automatic stay for cause other than a denial of adequate protection.

Dollarwatchers, Inc. v. Rutter (In Re Rutter) · filed 1982-12-09(d)(1)

The Court does not have to reach the issue of adequate protection in this adversary proceeding because under 11 U.S.C. § 362(d)(1), it is vested with discretion to find “cause” for other than a denial of adequate protection. “Adequate protection” is only one type of cause upon which the lifting or modifying of the stay may be premised.

Section 362(d)(2) requires lifting the automatic stay when the debtor has no equity in the property and the property is not necessary to an effective reorganization.

In Re Samuel G. Bialac, Debtor. Samuel G. Bialac v. Harsh Investment Corporation and Harsh Building Co. · filed 1982-12-13(d)(2)

The bankruptcy court shall lift an automatic stay under 11 U.S.C. § 362(d)(2) if it finds that the debtor has no equity in the property sought to be foreclosed upon, and that the property is not necessary to an effective reorganization.

Relief from the automatic stay may be denied as premature when completion of a Chapter 13 plan would discharge the debt underlying the proposed action, subject to renewal if the debtor seeks a hardship discharge.

Poole v. Lengyel (In re Lengyel) · filed 1982-12-13

An order will be entered denying relief from the automatic stay provided in 11 U.S.C. § 362 at this time and dismissing the plaintiffs complaint. If the debtor later requests the entry of a discharge under § 1328(b), the plaintiff may renew his request for relief by the filing of a motion herein.

Section 362(d)(1) permits relief from the automatic stay for cause when the debtor’s lease was terminated before bankruptcy.

Phoenix Associates, Inc. v. Pagoda International, Inc. (In Re Pagoda International, Inc.) · filed 1982-12-14(d)(1)

Thus, the landlord must look to relief under § 362(d)(1), that is, for cause. Very simply, the cause in this case is that Pagoda no longer has any interest in the lease. The lease has been terminated by the action in the state court.

A secured creditor must obtain relief from the automatic stay to recover estate assets, but may join a debtor’s recovery action against a third party without doing so.

National Sugar Refining Co. v. Lentz Milling Co. (In Re National Sugar Refining Co.) · filed 1982-12-15(d)

While a secured party seeking recovery against assets of the estate must first seek relief from the automatic stay, pursuant to 11 U.S.C. § 362(d), in the instant case, the debtor in possession is suing for recovery against a third party. As an interested party, the Bank is free to join in the proceedings as a co-plaintiff.

Section 362(d)(1) does not require a debtor to pay a secured creditor interest for the lost opportunity to foreclose and reinvest collateral proceeds as adequate protection against the automatic stay.

General Electric Mortgage Corp. v. South Village, Inc. (In Re South Village, Inc.) · filed 1982-12-30(d)(1)

Relief from the stay, provided in 11 U.S.C. Section 362(d)(1), may be had “for cause.” One cause is “the lack of adequate protection of an interest in property.” ... Accordingly, the court holds that this debtor need not pay interest to compensate GEMC for its “opportunity cost” in order to supply adequate protection.

Section 362(d)(2) permits relief from the automatic stay when an expired lease gives the debtor no equity and cannot be necessary to an effective reorganization.

Prudential Investments Co. v. Physique Forum Gym, Inc. (In Re Physique Forum Gym, Inc.) · filed 1982-12-30(d)(2)

As the debtor can have no equity in an expired lease, nor can an expired lease be considered necessary to an effective reorganization, the court concludes that plaintiff is entitled to relief from the automatic stay pursuant to 11 U.S.C. Section 362(d)(2).

Section 362(d)(2) requires both a lack of equity and a finding that the property is unnecessary to an effective reorganization before the court grants relief from the automatic stay.

United Kentucky Bank, Inc. v. Milo Ridge Resort & Executive Conference Center (In re Milo Ridge Resort & Executive Confe · filed 1983-01-06(d)(2)

As previously noted, § 362(d)(2) requires not only a finding that the debtor has no equity in the property, but in addition that the subject property is not necessary for an effective reorganization. Here, the proof has established that in fact the real estate in question is necessary for a hoped for rehabilitation.

Under § 362(d)(2), a junior mortgage held by a creditor willing to support reorganization need not be counted when measuring the debtor’s equity for a senior creditor’s request for relief from the stay.

Asquino v. Palmer River Realty, Inc. (In Re Palmer River Realty, Inc.) · filed 1983-01-07(d)(2)

Based on the facts presently before the Court, including the second mortgagee’s express desire to support this reorganization attempt, we conclude that the second mortgage should not be considered in determining whether there is an equity cushion in the subject property.

Section 362(d)(1) permits relief from the automatic stay to allow eviction when the debtor provides no adequate protection and uses bankruptcy to delay eviction, even if the debtor may retain an equitable interest in the premises.

Matter of Annex Camera · filed 1983-01-26(d)(1)

Here, Annex has no leasehold. It has not offered the plaintiff adequate protection. The Chapter 11 proceeding has been employed to frustrate and delay National’s eviction proceeding. Even if Annex has some lingering equitable interest in the premises, (on which issue this Court does not rule), the plaintiff is entitled to relief from the stay and authorization to execute its warrant of eviction.

Section 362(d) requires a party seeking to continue litigation against a debtor to obtain an order lifting, vacating, or modifying the automatic stay for good cause.

Johns-Manville Sales Corp. v. Doan (In Re Johns-Manville Corp.) · filed 1983-01-27(d)

Before the Ohio plaintiff and her counsel may properly proceed with the Ohio litigation, Section 362(d) requires that they must first apply to this court for an order to lift, vacate or modify the automatic stay for good cause shown.

A bankruptcy court order authorizing counsel to argue a pending appeal suffices to lift the automatic stay for that appeal.

Interdynamics, Inc., and Smiths Industries, Limited v. Firma Wolf, Arend Wolf, and Trans Tech, Inc. Appeal of Trans Tech · filed 1983-02-02(a)(1)

We believe that the bankruptcy judge’s order authorizing counsel to argue this appeal suffices to lift the section-362(a) stay.

Section 362(d)(1) permits relief from the automatic stay for cause only at the request of a party in interest; a mortgagee with no claim against the debtor or estate cannot seek that relief.

In Re Comcoach Corporation, Debtor-Appellee, the Roslyn Savings Bank v. Comcoach Corporation · filed 1983-01-13(d)(1)

To qualify for the “for cause” relief provided in section 362(d)(1), it is necessary that the party seeking such relief be “a party in interest.” ... Consequently, the Bank possesses no claim against the debtor or the estate, lacks “creditor” status, and cannot move to lift the automatic stay.

Bad faith may warrant relief from the automatic stay, but rejection of the contract the movant seeks to enforce can moot the request for stay relief.

Siedlecki v. Casale (In re S & R Service, Inc.) · filed 1983-01-19(d)(1)

The court might decline to approve the motion to reject however if it were apparent that the motion was made in bad faith or as part of a larger fraudulent scheme, just as bad faith might be grounds for lifting the stay were that issue not mooted by a rejection of the contract. ... Debtors’ motion to reject executory contract will be granted and plaintiff will be denied relief from the automatic stay.

A creditor seeking relief from the automatic stay must meet its burden of proof and demonstrate cause for relief.

Turpin v. Maupin (In Re Maupin) · filed 1983-02-07(d)(1), (g)(1)

IT IS FURTHER ORDERED that Plaintiff’s request for relief from stay is DENIED for failure to sustain Plaintiff’s burden of proof under 11 U.S.C. § 362(g)(1), and for failure to demonstrate “cause for relief” under 11 U.S.C. § 362(d)(1).

Section 362(d) permits denial of relief from the automatic stay when an equity cushion and additional mortgage collateral adequately protect the mortgagee’s interest.

First Mortgage Co. v. Lionti (In re Lionti) · filed 1983-02-08(d)

This case comes before the Court on a complaint for relief from the automatic stay imposed by § 362 of the Bankruptcy Code. ... In conclusion, the Court finds that the interest of the mortgagee is adequately protected by the existence of an equity cushion of $45,000 and by the second mortgages on the Delaware properties. An Order will be entered denying the requested relief.