The Bankruptcy Code provides that an individual, who has been a debtor in another bankruptcy case within the past 180 days and that case was dismissed due to either 1) the willful failure of the debtor to abide by court orders or to proceed with the proper prosecution of the case; or 2) to have requested and obtained the dismissal of the case after a creditor has previously filed a request for relief from the automatic stay, then such individual is not eligible to file another bankruptcy case for 180 days.
It is important to note that dismissal under this section of the Bankruptcy Code only pertains to cases that were dismissed within the previous 180 days. Any cases that have been dismissed more than 180 days ago are not effected. Therefore, a person is eligible to file a subsequent bankruptcy case. Also, the previous bankruptcy case must have been dismissed due to the willful misconduct of the debtor or the filing of a voluntary dismissal by the debtor following the filing for releif from the automatic stay by a creditor. If the case was dismissed for any other reason, then a person is not prevented from filing a new bankruptcy case within the next 180 days.
Another point worth noting is that the prohibition on filing applies to bankruptcies filed under any chapter of the Bankruptcy Code. This applies not only to the previous case that was filed, but also to any new case. For instance, a debtor who had a Chapter 7 Bankruptcy dismissed is not eligible to file another bankruptcy under any chapter of the Bankruptcy Code, including another Chapter 7 or a Chapter 13. Likewise, a debtor who had a Chapter 13 Bankruptcy dismissed is not elibible to file another bankruptcy under any chapter of the Bankruptcy Code, including another Chapter 13 or Chapter 7.
One of the reasons for an individual's ineligibity to file another bankruptcy case is due to the fact that the previous case was dismissed for the willful failure of the debtor to abide by court orders or to proceed with the proper prosecution of the case. Willful misconduct must be something that is more intentional or deliberate rather than something that is simply accidental or beyond the debtor's control. The courts generally look to the totality of the circumstances of the debtor's conduct in the prior bankruptcy case. In otherwords, whether the debtor's actions are a deliberate effort to delay the proceedings to the detriment of the creditors. If the court determines that the debtor was not making an effort to delay the proceedings, then willful misconduct on the part of the debtor in not likely to be found. Willful misconduct not only applies to the willful failure to abide by orders of court, but also the willful failure to appear before the court in the proper prosucution of the case. The court will look to the entire conduct of the debtor in arriving at the decision as to whether such conduct was willful. Normally, the failure to make the monthly Chapter 13 plan payments in a Chapter 13 Bankruptcy or the failure to appear for the meeting of creditors is not enough by itself to make a finding of willful failure to appear before the court. Repeated failures that often appear to serve no other purpose but to delay the proceedings is the type of willful misconduct that will lead to dismissal under this section of the Bankruptcy Code.
Another type of criteria for dismissal under this section is where the debtor requested and obtained the voluntary dismissal of the prior case following the filing a motion for relief from the automatic stay by a creditor. This makes an individual ineligible to file a new case if the prior case was voluntarily dismissed within 180 days of the filing of the new case. The reason behind such prohibition is to prevent an individual from abusing the process and preventing and/or hindering a creditor in seeking its' legal remedies. It is important to note that this prohibition applies only where the debtor requested and obtained the voluntary dismissal of the prior bankruptcy case after the filing of a motion for relief from the automatic stay. For instance, if a debtor requested the dismissal of the previous case prior to the filing of a motion for relief from stay by a creditor, then the debtor is not ineligible to file a new case within the 180 days, even though the previous case was dismissed after the filing of the motion for relief from the automatic stay. Otherwords, the creditor's motion for relief from stay must be filed prior to the debtor's request for dismissal in order for the 180 day bar to apply. This section of the Bankruptcy Code applies only where the debtor had the previous case voluntarily dismissed. Where the request for dismissal was by a creditor or the trustee, then the prohibition on filing for 180 days does not apply.
If a new case is filed and it is subsequently deterimed that it was filed in violation of the 180 day prohibition, then any automatic stay that came into effect upon the filing of the case is void and is not effective in preventing any sheriff sale or other collection efforts to moving forward.
Up to this point, it has been discussed about being prohibited from filing a new case for 180 days. However, the bankruptcy courts have the statutory authority to prohibit serial or repeat filers from filing for periods longer than 180 days.
If you find yourself in a similar situation and are uncertain about how to proceed or simply have other questions about the bankruptcy process, then contact Pittsburgh Bankruptcy Attorney Rodney Shepherd for a free consultation. Please complete the contact information form on our website or call 412 471-9670 and my secretary will immediately schedule you an appointment.