Is it possible to lose the protection of the automatic stay?
It is possible but unlikely, and unless the debtor is guilty of fraud, the consequences tend to be minimal. The automatic stay lasts throughout the proceedings unless a creditor has grounds for lifting it, and then files a motion that is granted by the Court. This is unusual in most Chapter 7 cases. The main basis for creditor relief arises when the petitioner has given a creditor a security interest in property that is rapidly losing value. A security interest is a right to property that a creditor can, by way of contractual agreement, repossess if the debtor defaults on payments. Examples include leased cars, houses, and, in some cases, furniture and jewelry. Lifting the stay only entitles one creditor to possession of secured property, not to other remedies. The majority of bankruptcy debt involves credit cards and medical bills, which are, for the most part, unsecured. Only credit cards issued subject to a purchase money security interest (some department store cards) are secured.
