Relief From the Automatic Stay - 11 USC 362(d) [2026]

The Four Statutory Grounds

Section 362(d) provides that on request of a party in interest, after notice and a hearing, the court "shall grant relief from the stay" by terminating, annulling, modifying, or conditioning the stay on one of four enumerated grounds. The use of "shall" is significant; once a movant satisfies one of the four grounds, relief is mandatory in form, although the precise nature of the relief (termination, modification, conditioning) is committed to the court's discretion.

Section 362(d)(1) - For cause, including lack of adequate protection.
Section 362(d)(2) - No equity in property and property is not necessary to an effective reorganization.
Section 362(d)(3) - Single-asset real estate cases (90-day clock).
Section 362(d)(4) - Real-property filings as part of a scheme to delay, hinder, or defraud creditors (in rem relief).

Official citation: 11 U.S.C. § 362(d)(1)-(4); 11 U.S.C. § 362(e); 11 U.S.C. § 362(g)

Section 362(d)(1): Cause and Adequate Protection

Subsection (d)(1) is the most flexible and most frequently invoked ground. "Cause" is not defined in the Code; courts have developed a non-exclusive list of cause factors that includes lack of adequate protection, bad faith filing, the creditor's interest in collateral being eroded by depreciation or accruing interest, the absence of any reasonable prospect of reorganization, the existence of pending litigation that should be resolved in another forum, and similar equitable considerations.

Adequate Protection

The leading specific instance of cause is lack of adequate protection. Section 361 enumerates three non-exclusive forms of adequate protection: periodic cash payments, additional or replacement liens, or such other relief as will result in realization of the "indubitable equivalent" of the creditor's interest in the property. A creditor whose collateral is depreciating without offsetting payments is the paradigmatic case. The Supreme Court in United Savings Association v. Timbers of Inwood Forest Associates, 484 U.S. 365 (1988), held that an undersecured creditor is not entitled to compensation for the time-value delay in foreclosure as part of adequate protection, narrowing the scope of the doctrine but leaving the depreciation analysis intact.

Bad Faith Filing as Cause

Courts have long held that a petition filed in bad faith can constitute cause for stay relief (and may also support dismissal under Section 1112(b) or Section 707(a)). Indicia of bad faith include the absence of unsecured creditors of any significant amount, single-asset cases filed on the eve of foreclosure with no realistic prospect of reorganization, serial filings, and filings that appear designed solely to obtain the litigation-stay benefits of bankruptcy without any genuine reorganization purpose.

Section 362(d)(2): No Equity and Not Necessary

Subsection (d)(2) authorizes relief "with respect to a stay of an act against property" if (A) the debtor does not have an equity in the property and (B) the property is not necessary to an effective reorganization. Both elements must be shown. The movant bears the burden on equity (Section 362(g)(1)); the debtor bears the burden on all other issues, including the necessity of the property to reorganization (Section 362(g)(2)).

Timbers clarified that "necessary to an effective reorganization" means more than that the property would be useful; it requires "a reasonable possibility of a successful reorganization within a reasonable time." A Chapter 7 case, by definition, cannot satisfy the second element because there is no reorganization in prospect; (d)(2) operates with greatest effect in Chapter 11 and Chapter 13 cases involving substantially underwater real or personal property.

Section 362(d)(3): Single-Asset Real Estate

Subsection (d)(3) applies in cases where the debtor falls within the Section 101(51B) definition of "single asset real estate" debtor. In such cases, the secured creditor is entitled to relief unless, within 90 days after the order for relief (or such later date as the court may determine, but only on motion filed within the 90-day window), the debtor either (A) files a plan of reorganization that has a reasonable possibility of being confirmed within a reasonable time, or (B) commences monthly payments to each creditor whose claim is secured by the real estate in an amount equal to interest at the contract rate (or, since 2005, the then applicable nondefault rate) on the value of the creditor's interest.

The 90-day clock is strict. A single-asset real estate debtor that misses both compliance options forfeits the protection of the stay as to the secured creditor by operation of statute; the creditor still must move, but the court's role is largely ministerial. The 2005 amendments removed the prior $4 million debt cap, making (d)(3) applicable to single-asset cases of any size.

Section 362(d)(4): In Rem Relief

Subsection (d)(4) authorizes the court to grant relief from the stay "with respect to a stay of an act against real property" if the court finds that the filing of the petition was part of a scheme to delay, hinder, or defraud creditors that involved either (A) transfer of all or part ownership of, or other interest in, such real property without consent of the secured creditor or court approval, or (B) multiple bankruptcy filings affecting such real property.

The signal feature of (d)(4) is that, when the order is recorded in the appropriate land records, it provides in rem relief that is binding in any other case purporting to affect the same real property for a period of two years after entry. A successor filer who attempts to re-stay foreclosure on the same property must move for relief from the (d)(4) order in the bankruptcy court (not in the new case) and demonstrate changed circumstances. This is the principal congressional tool against deed-fragmentation and serial-filing schemes designed to stretch foreclosure indefinitely.

The Section 362(e) Hearing Deadline

Section 362(e)(1) provides that the stay terminates by operation of law 30 days after a stay-relief motion is filed unless the court orders the stay continued in effect after notice and a hearing. The 30-day clock runs from the date the motion is filed, not from service or scheduling. To extend the stay beyond 30 days, the court must conclude a final hearing (or at least a preliminary hearing at which the court finds a reasonable likelihood that the party opposing relief will prevail at the final hearing) within the 30-day window.

Section 362(e)(2), added in 2005, applies in individual cases under Chapters 7, 11, and 13. The stay terminates 60 days after the motion is filed unless the court enters a final order within that 60-day window, the period is extended by agreement of all parties in interest, or the court extends the period for "such specific period of time as the court finds is required for good cause."

Practical note: The 30-day and 60-day clocks are often inadvertently violated when courts schedule contested matters on routine motion-day calendars. A movant who wishes to preserve the stay's termination by operation of law should object to any continuance and document that the deadline has been reached without a final ruling.

Burdens of Proof: Section 362(g)

Section 362(g) allocates the burden of proof in stay-relief litigation. The party requesting relief has the burden on the issue of the debtor's equity in the property. The party opposing relief has the burden of proof on all other issues. The practical effect is that a secured creditor seeking (d)(2) relief need only put on evidence of value and outstanding debt; if the showing demonstrates no equity, the debtor must then come forward with evidence that the property is necessary to an effective reorganization.

Procedural Mechanics

Stay-relief motions are governed by Federal Rule of Bankruptcy Procedure 4001(a) and the local rules of each district. The motion is a contested matter under Rule 9014. Notice is typically required to the debtor, the trustee, the United States Trustee, and any committee of unsecured creditors. Many districts have adopted streamlined "negative notice" procedures for unopposed stay-relief motions involving residential real property or vehicles, allowing entry of orders without a hearing if no objection is filed within a stated period.

Section 362(f) authorizes ex parte relief from stay "without a hearing" when necessary to prevent irreparable damage to the interest of an entity in property, before there is an opportunity for notice and a hearing. Ex parte relief is exceptional and requires a strong showing.

Section 362(h), often overlooked, automatically terminates the stay as to personal property securing a claim or subject to an unexpired lease if the individual Chapter 7 debtor fails to file a timely statement of intention under Section 521(a)(2) or fails to perform that intention within the times specified.

Annulment and Retroactive Relief

Section 362(d) authorizes the court to "annul" the stay, which has the effect of validating acts taken in violation of the stay as if the stay had never applied. Annulment is exceptional and is typically reserved for cases involving creditors that acted without knowledge of the petition or where annulment serves equitable purposes that override the policy of strict stay enforcement. The Ninth Circuit's Schwartz framework (In re Schwartz, 954 F.2d 569 (9th Cir. 1992)) is widely cited for the proposition that violations are void rather than voidable, with annulment serving as the validation mechanism.