What does a Relief from Automatic Stay allow a creditor to do?

A Relief from Automatic Stay allows a creditor to take action on an asset during bankruptcy proceedings. When a bankruptcy petition is filed, an automatic stay goes into effect, which prevents creditors from pursuing collection activities against the debtor or their assets. However, if a creditor successfully obtains relief from the automatic stay from the bankruptcy court, it means they can proceed with actions, such as repossessing collateral or foreclosing on a property, that would normally be prohibited by the automatic stay. This relief is often granted if the creditor can demonstrate that their interests are not being adequately protected or that they would suffer irreparable harm if the stay remains in place.

The other choices reflect actions that do not directly pertain to the relief from automatic stay. For instance, submitting a Proof of Claim is a necessary step in the bankruptcy process for creditors but does not involve any action being taken on the assets. Similarly, negotiating terms with the debtor can occur independently of the automatic stay and does not grant any specific permissions to act on the asset. Canceling the automatic stay itself would be a misstatement; it’s the relief from it that allows for creditor actions, rather than cancelling the stay altogether.