Repeat Filings and the Automatic Stay in Bankruptcy – San Diego Bankruptcy Attorney
As has been discussed in various blog posts (Lifting the Automatic Stay in Chapter 7 Cases, Understanding the Importance of the Automatic Stay) the automatic stay is one of the most powerful tools afforded to a debtor in bankruptcy. Generally, the automatic stay prevents certain types of creditors from taking any action to collect on debts that were owed prior to the bankruptcy filing. The automatic stay prevents foreclosures, wage garnishments, and lawsuits against the debtor from moving forward once a bankruptcy case has been filed. And while the automatic stay can be lifted by order of the Bankruptcy Court, it still does generally afford a debtor some breathing room at the commencement of a bankruptcy case.
Typically, the automatic stay occurs automatically upon the filing of a new bankruptcy case and remains in effect during the pendency of a case or until a Court issues an order lifting the stay. However, this is not the case when it comes to repeat filings.
Generally, if a bankruptcy debtor had a prior bankruptcy case pending and dismissed within one year of re-filing a bankruptcy petition, the automatic stay occurs automatically upon the re-filing, but is only in effect for thirty (30) days. In such cases, in order to have the automatic stay extended indefinitely beyond the first thirty (30) days of the case, a debtor must bring a motion before the Court requesting such relief. This motion to extend the stay must be filed and heard within the first thirty (30) days of the case, and, as a result, must be brought relatively soon after the new case is filed.
However, if a bankruptcy debtor had two or more prior bankruptcy cases pending and dismissed within one year of re-filing a bankruptcy petition, the automatic stay does not automatically go into effect upon the new filing. Rather, no stay goes into effect at all. In this case, the debtor’s only option is to move the Court for an order imposing an automatic stay. This motion must be filed within thirty (30) days of filing the new case.
Please note that this blog post does not discuss the requirements for motions to extend or impose the automatic stay, or the standards that Courts look at when ruling on such motions. If you have any questions in connection with the automatic stay and repeat filings, please contact the VC Law Group, LLP via telephone at (858) 519-7333 or email at firstname.lastname@example.org.