Bankruptcy Law Questions? Ask a Bankruptcy Lawyer.
When 2 or more Bankruptcies are filed in the one year preceding the current Bankruptcy filing, there is a 30-day automatic stay, which can be extended upon a request from the debtor.This extension is not automatic, and the debtor must prove that the current Bankruptcy was not filed in "bad faith". If the debtor cannot prove the current Bankruptcy was not filed in "bad faith", the debtor will not be able to have the Chapter 13 plan approved - and the case will be dismissed.In summary, you do have to honor the automatic stay if a Chapter 13 is filed - at least for the first 30 days after the case is filed.I think this is what you wanted to know. If not, please let me know.Thank you.
I need clarification. This will be their third bankruptcy within one year. The bankruptcy law says there is no automatic stay on the third bankruptcy.
I want to keep garnishing without interruption AND I want to keep garnishing even if the Chapter 13 plan is approved.
So let's suppose the debtor does show the current bankruptcy was not filed in "bad faith" and asks for confirmation of the plan. Let's suppose the plan is approved for the third BK chapter 13 filing. An order is entered confirming the plan. Does confirmation of that plan then impose a stay to my garnishment?
Thank you for the clarification.
If this is the 3rd filing Chapter 13 filing in one year, then the automatic stay does not go into affect - not even for the initial 30 days - unless a motion is filed requesting the court to allow the automatic stay to take effect.
This means you can continue to garnish the debtor unless and until an order is issued by the Bankruptcy court that the automatic stay is in effect.
For the automatic stay to go into effect (for the Bankruptcy court to issue that order), the debtor must prove the current case was not filed in bad faith. If the debtor cannot prove the case was not filed in bad faith, then the automatic stay cannot go into effect, the Chapter 13 plan cannot be confirmed, and the case will be dismissed.
If the debtor can prove the third Chapter 13 was not filed in bad faith, the automatic stay can be implemented, the plan confirmed, and you will then not be able to continue to garnish the debtor.
In this case of the third BK filing would they have to get the plan confirmed and the automatic stay back into effect together?
Does the court ever allow a plan confirmation without an order reinstating the automatic stay in a 3rd bk filing?
A plan cannot be confirmed if the automatic stay is not in effect - because a plan cannot usually be carried out if there is no automatic stay.
Getting an automatic stay into effect is done by order of the Bankruptcy judge. Plan confirmation is done by the Bankruptcy trustee. These are not done at the same time.