Chapter 11, D. Modification of the Stay

• Jurisdiction: United States

D. Modification of the Stay

In order to pursue a personal-injury or liability claim against the debtor, whether in the form of an existing lawsuit or merely the assertion of a claim against the debtor, the claimant must file a motion for modification of the automatic stay with the bankruptcy court. Generally, the claimant will stipulate that he will seek recovery only to the extent that there are available insurance proceeds covering the claim. Further, the claimant should stipulate that he will seek to satisfy the claim solely from assets that are not property of the debtor's estate. These stipulations are significant and are essentially prerequisites to obtaining...