What must a creditor obtain to continue repossession after a bankruptcy filing?

• A. Court-ordered dismissal of the bankruptcy case.
• B. Relief from the automatic stay from the bankruptcy court.
• C. Automatic stay continues indefinitely no matter what.
• D. Relief is granted automatically after 60 days.

Answer: (B)

When a bankruptcy case is filed, an automatic stay goes into effect that halts most collection actions, including repossession of collateral. To keep repossessing, the lender must obtain relief from the automatic stay from the bankruptcy court. This is not automatic; the creditor must file a motion asking the court to lift or modify the stay, and the court will grant relief for proper reasons (for example, if the collateral is not adequately protected or if the debtor’s case is not providing a feasible plan). The stay isn’t perpetual and can end if the case is dismissed, the debtor's discharge is entered, or the court grants relief from stay.