The automatic stay halts enforcement on filing. A creditor seeking to proceed must obtain relief.
Grounds. Cause, including lack of adequate protection of an interest in property; or, for an act against property, that the debtor has no equity in the property and it is not necessary to an effective reorganisation.
Not necessary to an effective reorganisation requires more than that the property is important — the debtor must show a reasonable possibility of a successful reorganisation within a reasonable time.
Adequate protection may be provided by periodic payments, replacement liens or other relief giving the indubitable equivalent. An equity cushion may itself suffice.
Single asset real estate cases carry an accelerated timetable: relief is granted unless the debtor files a plan with a reasonable possibility of confirmation or commences monthly interest payments within a statutory period.
Procedure and timing. The stay terminates automatically if the court does not rule within thirty days of the request unless it orders continuation after notice and a hearing, which makes prompt scheduling important.
Stay violations. Acts taken in violation are void or voidable, and wilful violations expose the creditor to damages and fees. A creditor uncertain whether the stay applies should seek comfort rather than proceed.