Types of Bankruptcy Automatic Stays

Types of bankruptcy and attorney fee variations

The automatic stay acts as an injunction against further collection efforts against the estate. The stay is subject to exceptions set forth in 11 U.S.C. Sec. 362. In theory, the prohibition on collection is intended to provide an opportunity in chapter 11 bankruptcy for the debtor to propose a reorganization plan.

Automatic stays are not permanent. Any party in interest may file a motion requesting termination. The basis for a motion to lift stay must be a specific statutory exception, and only applies to the bankruptcy type and particular creditor, debt and collateral listed in the Judge's order. The stay remains effective against all other creditors, debts and collateral. Another notable exception applies when the debtor lacks equity in property subject to a lien. If the encumbered property is not necessary for reorganization, the court may grant permission for foreclosure upon past due liabilities. For more information, see:

The Chapter 11 attorney fee

While this type of case is pending, professional fees accrued are payable from the estate as in all other types of bankruptcy. Court appointed professional services are payable as well, as are attorney fees for the debtor's attorney. Any professional whose fee remains unpaid may seek payment by court order. Likewise, other routine expenses incurred by a debtor in possession, after a petition is filed, are allowed for the continued operation of businesses and personal affairs. More than all other types of bankruptcy, attorney fees accumulate more rapidly than attorney fees in Chapter 7 and 13 cases.