Motion Denied! Multiple Bankruptcy Filings
I had a hearing today for a Motion to Invoke the Automatic Stay. Before the hearing I explained to the client that there was a good chance the Judge wasn’t going to grant the motion. As I had predicted, the Judge denied the motion. Now, the client is still in a Chapter 13 bankruptcy, but isn’t afforded any of the protection of a bankruptcy.
The Judge denied the motion for a couple of reasons. First, this was the Debtor’s seventh bankruptcy in 8 years. Only one of them had he been in longer then a month. On this basis, it looked like the Debtor was a serial filer and only using the bankruptcy system to prevent his creditors from taking his property. It didn’t seem to the Judge that the Debtor was serious about being in a bankruptcy.
Second, he has no consistent job history. He has just started a new job which to date hasn’t produced any income. All the income he anticipates making is speculative and there is nothing to show the Debtor will be able to make his Trustee payment and his mortgage payment.
Under Section 362 of the bankruptcy code, when a Debtor is filing multiple cases, it is assumed the Debtor has filed the bankruptcy in bad faith, and must prove otherwise. Based on all the information the Judge had to go on, he couldn’t find the case was filed in good faith and had to deny the motion.
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