Asked by Tabitha Mooney on Jul 26, 2024
Verified
Which of the following is true regarding the effect of an automatic stay on claims of secured creditors in a Chapter 7 proceeding?
A) The automatic stay affects the claims of secured creditors in the same way it affects the claims of unsecured creditors.
B) Secured creditors with claims of over $5,000 are not affected by the automatic stay.
C) Secured creditors with claims of over $15,000 are not affected by the automatic stay.
D) Secured creditors with claims of over $20,000 are not affected by the automatic stay.
E) The court may exclude secured creditors from the automatic stay if they petition the court to show that they do not have adequate protection under the stay.
Automatic Stay
A legal provision that halts actions by creditors to collect debts from a debtor who has declared bankruptcy, giving the debtor temporary relief.
Chapter 7
A type of bankruptcy that involves the liquidation of a debtor's non-exempt assets by a trustee to pay creditors.
Secured Creditors
Creditors who have a legal right to seize specific assets of the debtor if the debtor fails to repay the debt as agreed.
- Recognize the impact of an automatic stay on secured and unsecured creditors in Chapter 7 proceedings.
Verified Answer
EM
Ederline MilienJul 26, 2024
Final Answer :
E
Explanation :
The court may exclude secured creditors from the automatic stay if they petition the court to show that they do not have adequate protection under the stay.
Learning Objectives
- Recognize the impact of an automatic stay on secured and unsecured creditors in Chapter 7 proceedings.