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What Happens If My Bankruptcy is Dismissed and I Have to Re-File?

Posted on Mar 28, 2014 in Bankruptcy, Bankruptcy procedures, Chapter 13, Chapter 7

In baseball, a batter gets three strikes, then he’s out.  It doesn’t quite work that way with bankruptcy.  Take our clients Aaron and Wendy.  They filed a Chapter 13 bankruptcy and their bankruptcy was dismissed.  They weren’t able for different reasons to make their plan payments for the complete plan, and wanted to start over.

Aaron and Wendy could have filed a Chapter 13 bankruptcy again (and they did).  However, the bankruptcy code puts in rules when someone has two bankruptcies open in the same year.  These rules affect the “automatic stay”, the protection you get when filing for bankruptcy.  This is the protection that tells creditors to stop foreclosures, wage garnishments, car repossessions, and lawsuits.

The automatic stay is good for the full bankruptcy unless the court gives permission to a creditor to get around it.  So if you stop paying on your mortgage for four months, the mortgage company can ask the court to let them out of the protection so they can foreclose.

But when one case was dismissed (or discharged and finalized), then another case is filed, the automatic stay protection only lasts for 30 days.  To make it stay for the whole bankruptcy again, you have to ask the judge to continue or extend it and explain why.

To get what we wanted in court, we had to do what the courts ask when we need to ask for something – we filed a motion.  We filed the motion for Wendy and Aaron to continue their bankruptcy protection throughout their new bankruptcy.  In our explanation, we included their statements about why their last case didn’t work but this case would be more successful.  Sometimes that is enough for the court to agree and for creditors to stay quiet and not object or fight it.

Sometimes the judge wants to hear an explanation in person.  That’s what happened here.  The judge listened and agreed that this case was filed in good faith and not simply another way to stall and avoid creditors.  So she agreed and now our clients are protected again.

If you’ve had one case (or more) dismissed and want to re-file, you’ll want a lawyer to explain how to keep that automatic stay and protect yourself from creditors.  Call 847-249-9100 or 262-694-7300 in Wisconsin, or e-mail us to see what we can do to make sure you keep the automatic stay in a new bankruptcy filing.

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