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A relief from automatic stay is a legal order that allows a creditor to pursue collection of a debt against somebody who has filed for bankruptcy. Basically, it allows a creditor to enforce a debt despite the debtor's bankruptcy filing.
Automatic Stay
As soon as a debtor files a petition for bankruptcy, the law imposes an automatic stay that forbids all creditors from taking any actions to enforce or collect a debt.
Request for Relief
If a creditor wants to pursue a debt, then the creditor must apply to the bankruptcy court for relief from the automatic stay.
Reasons for Relief
Secured creditors, such as mortgage lenders, are commonly given relief to enforce their lien on the debtor's property. Other than that, it is rare for a court to grant relief from the automatic stay.
Significance
If a creditor is granted relief, this means that bankruptcy will not get rid of, or "discharge," that particular debt.
Warning
Violation of the automatic stay, without court approval for relief, is a violation of law that can result in severe civil penalties.
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