Adequate Protection

Adequate protection is the concept that secured creditors deserve assurances that their interest in collateral is protected in bankruptcy from loss of value. Lack of adequate protection can be grounds for relief from the automatic stay.

Glossary Terms: 
Automatic Stay
Standing Trustee

Frequently Asked Questions

Our frequently asked questions also address Adequate Protection:

What is a Motion for Relief from the Stay?

A motion for relief from the automatic stay is a common motion brought by a creditor, who wishes to take action that would otherwise be barred by the bankruptcy automatic stay. Most frequently, a motion for relief seeks court permission to foreclose on real estate or repossess a car or other vehicle. A motion might also be brought to in order to continue a legal proceeding outside of bankruptcy.

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What is an Adequate Protection Payment?

Basically, adequate protection payments are early-case disbursements made by the chapter 13 trustee from funds the debtor as paid to the trustee, which are directed towards holders of car loans and other certain secured claims on personal property. The theory behind these small payments is to protect the lender from depreciation while the case is pending.

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