Motion To Continue Stay in Subsequent Filings

Categories: Automatic Stay, Chapter 13, Chapter 7, Foreclosure

     A literal reading of 11 U.S.C. Section §362(c)(3) terminates the stay 30 days after the filing of the petition only with respect to the debtor, not property of the estate. However, coming into bankruptcy court in the Central District, recent rulings have discussed whether the Stay terminates entirely or only with respect to the Debtor in subsequent bankruptcy case filings.

      In re Reswick Jr., 2011 Bankr. LEXIS 873, (B.A.P. 9th Cir. February 4, 2011) held that the Automatic Stay terminated as to the debtor and property of the debtor’s bankruptcy estate 30 days after the debtor’s second bankruptcy filing. The court agreed with the persuasive reasoning set forth in In re Daniel, 404 B.R. 318 (Bankr. N.D. Ill. 2009), and held that the automatic stay terminated in its entirety on the 30th day after the petition date.” (Emphasis added.) This is a minority decision.

The Reswick court analyzed the majority viewpoint [*364],

“The majority interpretation finds the phrase “with respect to the debtor” to be both critical and unambi-guous, and concludes that on the 30th day after the peti-tion date, the automatic stay terminates only with respect to the debtor and the debtor’s property, but not as to property of the estate. See, e.g., Holcomb v. Hardeman (In re Holcomb), 380 B.R. 813 (10th Cir. BAP 2008); [**7] Jumpp v. Chase Home Finance, LLC (In re Jumpp), 356 B.R. 789 (1st Cir. BAP 2006); In re Pope, 351 B.R. 14 (Bankr. D.R.I. 2006); In re Murray, 350 B.R. 408 (Bankr. S.D. Ohio 2006); In re Brandon, 349 B.R. 130 (Bankr. M.D.N.C. 2006); Bankers Trust Co. of Cal. v. Gillcrese (In re Gillcrese), 346 B.R. 373 (Bankr. W.D. Pa. 2006); In re Williams, 346 B.R. 361 (Bankr. E.D. Pa. 2006); In re Harris, 342 B.R. 274 (Bankr. N.D. Ohio 2006); In re Jones, 339 B.R. 360 (Bankr. E.D.N.C. 2006); In re Moon, 339 B.R. 668 (Bankr. N.D. Ohio 2006); In re Johnson, 335 B.R. 805 (Bankr. W.D. Tenn. 2006). Although these decisions state that the court need not read beyond the phrase “with respect to the debtor” to discern its meaning, see, e.g., Jones, 399 B.R. at 363 (“Section 362(c)(3)(A) provides that the stay terminates ‘with respect to the debtor.’ How could that be any clear-er?”), these decisions arguably do read beyond the phrase because they find that the stay terminates with respect to the debtor and to any property of the debtor that is not property of the estate. Id. at 362; see also Holcomb, 380 B.R. at 816 (“[W]e conclude that the language of § 362(c)(3)(A) terminates the stay only as to the debtor [**8] and the debtor’s property.”); Jumpp, 356 B.R. at 797 (“Section 362(c)(3)(A) provides for a partial termination of the stay.”).”

On May 9, 2011, the Central District Riverside Division Court in In re Rinard, 2011 Bankr. LEXIS 1731, Judge Clarkson held,

“Under 11 U.S.C. § 105(a), a bankruptcy court “may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title.” Section 105(a) gives the bankruptcy courts the power to stay actions that are not subject to the 11 U.S.C. § 362(a) automatic stay (footnote omitted) but “threaten the integrity of a bankrupt’s estate.” Canter v. Canter (In re Canter), 299 F.3d 1150, 1155 (9th Cir. 2002) (citation and quotation marks omitted); Ingersoll-Rand Fin. Corp. v. Miller Mining Co., 817 F.2d 1424, 1427 (9th Cir. 1987).” Solidus Networks, Inc. v. Excel Innovations, Inc. (In re Excel Innovations, Inc.), 502 F.3d 1086, 1093 (9th Cir. 2007). The Ninth Circuit, in Solidus Network further found that the usual preliminary injunction standard applies to stays of proceedings against non-debtors under § 105(a). Solidus at 1094.”

One of our judges recently overruled a motion for turnover of property that was foreclosed upon after the Stay expired.  What this means is that you MUST file a Motion to Continue the Automatic Stay beyond the 30 days when your client has filed a subsequent filing within 12-months preceding the filing of their current case.  In our Central District these are fairly simple form motions that are routinely granted. These motions MUST be filed and heard within the first 30 days of the case. Don’t risk losing your client’s assets.

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