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John A. Flynn, Esq.
John A. Flynn, Esq., Attorney
Category: Bankruptcy Law
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Experience:  14 Years Experience in Bankruptcy - Mid-South Super Lawyer
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Does automatic stay mean that the lawsuit will be dismissed

Resolved Question:

Does automatic stay mean that the lawsuit will be dismissed soon?

When the defendant filed for bankruptcy chapter 7, my lawsuit was put on "automatic stay". However, 20 days later my lawsuit was "dismissed without prejudice", my attorney never asked me about this, I never gave permission to dismiss the entire action. Is it normal? Can I reactivate the lawsuit with another attorney?
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  John A. Flynn, Esq. replied 1 year ago.
This is not uncommon, and many judges will do this "sua sponte" (latin for "of its own accord"). Some attorneys will ask the Court to do this because they fear that not by not dismissing they are violating the automatic stay. However, you are protected in that it was dismissed "without prejudice" meaning that you can refile the lawsuit either in the event the bankruptcy is dismissed OR if you go to the Bankruptcy Court and obtain something called "relief from stay" which is like permission to pursue the debtor or assets of the Debtor with your State law remedies (lawsuit). Make sure you or your attorney have entered an appearance and requested Notice in the Bankruptcy case. In the event the case is dismissed, if your statute of limitations for filing suit against the Debtor has otherwise run out, you will have ONLY 30 DAYS in which to file a new lawsuit. Good luck.
Customer: replied 1 year ago.

1. Does it make sense to refile the suit if I have already filed a proof of claim in the bankruptcy court for the amount of the debt?


2. What is the statute of limitations for refiling the dismissed case? it was dismissed 4 months ago, is it too late to try to refile ?

Expert:  John A. Flynn, Esq. replied 1 year ago.
1. You cannot file suit against the Defendant if he is still a Debtor in the Bankruptcy case. That would be a violation of the automatic stay and even if you prevailed in the refiled suit, any Court orders entered in violation of the stay are void and of no effect. If you wish to refile you need to either hire a bankruptcy attorney of your own to file a Motion for Relief from Stay in the Defendant's bankruptcy case, or wait and see if his case is dismissed and then refile.

2. The pendency of the bankruptcy will toll your statute of limitations until 30 days after a dismissal of the bankruptcy, unless your statute of limitations provides a longer time frame.
John A. Flynn, Esq., Attorney
Category: Bankruptcy Law
Satisfied Customers: 189
Experience: 14 Years Experience in Bankruptcy - Mid-South Super Lawyer
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