The lack of creditor opposition isn’t enough for the bankruptcy court to extend the automatic stay for a repeat filer in chapter 13, for reasons explained by Chief Bankruptcy Judge Gregory L. Taddonio of Pittsburgh, Pa.
Represented by the same lawyer in every case, the debtor had filed bankruptcy petitions six times since 2007. The debtor’s most recent chapter 13 petition was dismissed in March for failure to make plan payments. The debtor filed another chapter 13 petition 10 days later, accompanied by a motion under Section 362(c)(3)(B) to extend the automatic stay that would otherwise expire 30 days after the most recent filing.
As Judge Taddonio said in his July 6 opinion, the motion for an extension said, without details, that the debtor had sufficient income to make plan payments. He described the motion as “bare bones.”
Section 362(c)(3)(B) permits the bankruptcy court to extend the automatically expiring stay “only if the party in interest demonstrates that the filing of the later case is in good faith as to the creditors to be stayed.”
At argument on the motion, the debtor did not appear to testify and explain why she was filing again in good faith. Judge Taddonio said that the lawyer primarily relied on the lack of creditor opposition and noted that the debtor was asking for permission to pay the filing fee in installments.
At argument, the lawyer “could not, however, identify any specific changed circumstances since the previous case that would indicate a newfound ability to make plan payments,” Judge Taddonio said. Being unable to pay the filing fee up front “does not typically reflect improved finances,” the judge said.
Turning to the law, Judge Taddonio explained how the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was adopted “to curb perceived abuse by serial filers.” The stay expires in 30 days if a case by the debtor has been dismissed within one year and does not come into effect if two or more cases were dismissed within a year. See Section 362(c)(3).
In a case with only one dismissal in the prior year, Judge Taddonio explained that Section 362(c)(3)(B) would enable him to “extend the stay if the debtor can rebut the presumption that the filing was not in good faith by presenting clear and convincing evidence to the contrary.”
“Typically,” Judge Taddonio said, an extension “requires a ‘substantial change’ in financial or personal affairs since the prior dismissal, or some other reason to suggest that the new case will succeed.” The motion before him, on the other hand, “does not merely lack detail, it is completely devoid of any allegation suggesting a change in the Debtor’s financial or personal affairs since the dismissal of her previous case,” the judge said.
Specifically, Judge Taddonio held that the “vague” statements in the motion “cannot carry the Debtor’s burden and the use of generic allegations, unmoored to the specific facts of a debtor’s case, is not an acceptable practice.”
Finding that the debtor failed to meet her burden, Judge Taddonio denied the motion for an extension of the stay because the lawyer “relied solely on the lack of creditor opposition to the Motion as evidence of good faith.”
The lack of creditor opposition isn’t enough for the bankruptcy court to extend the automatic stay for a repeat filer in chapter 13, for reasons explained by Chief Bankruptcy Judge Gregory L. Taddonio of Pittsburgh, Pa.
Represented by the same lawyer in every case, the debtor had filed bankruptcy petitions six times since 2007. The debtor’s most recent chapter 13 petition was dismissed in March for failure to make plan payments. The debtor filed another chapter 13 petition 10 days later, accompanied by a motion under Section 362(c)(3)(B) to extend the automatic stay that would otherwise expire 30 days after the most recent filing.
As Judge Taddonio said in his July 6 opinion, the motion for an extension said, without details, that the debtor had sufficient income to make plan payments. He described the motion as “bare bones.”