Local Rule Rule 4001-1: RELIEF FROM AUTOMATIC STAY

Rule 4001-1 RELIEF FROM AUTOMATIC STAY

(a) A party moving for relief from the automatic stay under section 362 of the Bankruptcy Code must obtain a return date for the motion that is not more than thirty (30) days after the date on which the motion will be filed.

(b) If the debtor is an individual, the motion must be supported by an affidavit, based on personal knowledge, attesting to the circumstances of any default with respect to an obligation related to the motion.

(c) If the debtor is an individual, a party moving for relief from the automatic stay under section 362 of the Bankruptcy Code relating to a mortgage on real property or a security interest in a cooperative apartment must file, as an exhibit to the motion, a completed copy of the form available on the Court's website at the following link (https://www.nysb.uscourts.gov/sites/default/files/pdf/362worksheetA.pdf). Compliance with this subdivision shall constitute compliance with subdivision (b) of this rule.

(d) Any order granting relief from the automatic stay to permit the continuation of a foreclosure action in the New York State courts regarding property of an estate must include the following terms, a sample form for which can be found on the Court's website at https://www.nysb.uscourts.gov/sites/default/files/4001-1_model_order.docx:

(i) that the party in whose favor such relief has been granted must (a) provide advance written notice to the trustee and debtor of any scheduled foreclosure sale, (b) provide contemporaneous written notice to the trustee and debtor of any referee's report of sale, and (c) provide written prompt notice to the trustee and debtor of any surplus moneys arising from the sale, as determined pursuant to section 1354 of the Real Property Actions and Proceedings Law;

(ii) that notwithstanding the provisions of section 1354(4) of the New York Real Property Actions and Proceedings Law, all surplus moneys constitute property of the bankruptcy estate that is subject to the exclusive jurisdiction of the Bankruptcy Court, and all such surplus proceeds shall be turned over to the trustee or debtor-in-possession for administration under the Bankruptcy Court's supervision; and

(iii) that notwithstanding the provisions of section 1354(4) of the New York Real Property Actions and Proceedings Law, any person claiming any entitlement to any portion of the surplus proceeds must do so in the Bankruptcy Court pursuant to the applicable terms of the Bankruptcy Code and the Bankruptcy Rules.

Comment This rule is derived from Former Local Bankruptcy Rule 44(a)

Bankruptcy Rule 4001(a) provides that a request for relief from the automatic stay shall be made by motion. Section 362(e) of the Bankruptcy Code contemplates that a hearing will commence within thirty (30) days from the date of the request for relief from the automatic stay. Local Bankruptcy Rule 9006-1 governs the time within which responsive papers may be served.

Subdivision (a) of this rule was amended in 2004 to put the burden of obtaining a timely return date on the movant. It does not attempt to deal with the ramifications of the movant's failure to comply with the rule.

Subdivision (b) of this rule was added in 2004 to assure the Court of the accuracy of allegations of default in cases concerning an individual debtor.

Subdivision (c) of this rule, which derives from General Order M-346 as amended by General Order M-347, was added in 2008 to assure the Court of the accuracy of allegations of default in proceedings relating to a mortgage on real property or a security interest in a cooperative apartment of an individual debtor. The Court may direct the submission of the form set forth in subdivision (c) of this rule in connection with other motions, including motions for adequate protection. In 2024, a link was added to this subdivision for ease of access to the form referenced in the rule.

Subdivision (d) of this rule was added in 2024 to address cases in which surplus proceeds remain after the conduct of foreclosure sales regarding property of an estate. The provisions ensure that the parties to the bankruptcy case have proper notice of the events in the foreclosure case and of the availability of surplus funds (if there are any), and further ensure that the Bankruptcy Court retains its proper jurisdiction over the distribution of those surplus proceeds and the resolution of claims to those surplus proceeds.