Generally speaking, the creditor will wait until the debtor goes three months in past due before they file a motion for relief from stay, but sometimes they will wait longer or file earlier, and sometimes, as I experienced this morning, their motion will be   complete crap and will need to be fought appropriately.

The creditor filed their motion claiming my client was three months behind on their mortgage.  They weren’t.  The creditor claimed they hadn’t made payment in October, November, or December, they did.

Now generally speaking, a creditor will post a payment for the last due date.  If you miss June’s payment and then pay in July, that payment will be considered the June payment and you will be past due for July.

The creditor is required to plead that in their motion and if they have not proven that in their motion, the motion should fail.

This morning was the first time the creditor provided me with a payment history proving that my client was past due.

The problem is that this leads to an additional expense to the already financially strapped bankruptcy client.  The motion I defended today would have cost my client $750 if I had charged them, but since the client was a Chapter 7 client, there was no way my client was going to be able to pay this so I had to do it pro bono (this is called involuntary free work).

I already knew what the creditor was looking for even before we went to court today.  If I had just rolled over and allowed the creditor to get a stipulation for my client, I wouldn’t have had to appear in court today, in fact the judge gave the creditor’s local counsel a tongue lashing for it.  The creditor is fishing for a stipulation that would include their legal fees.  Their legal fees were $700 + the cost of filing the motion, which was $150.

This was essentially a fishing expedition by the creditor for $700 additional dollars that they were not entitled to.  It is a low risk proposition.  A lot of attorneys will take the creditor’s motion at face value, but when they are dealing with me they are dealing with a former debt collector, so I don’t have the trust instinct that other bankruptcy attorneys have.  It’s also a low cost investment for the cost of the motion because most of the time they will get that back in the stipulation.

This creditor filed a crap motion and today the judge gave me the option of arguing the motion and having it dismissed or continuing the hearing for two weeks and trying to resolve the matter with the creditor.

The vindictive, nasty, mean-spirited attorney in me wanted to argue the motion and have it dismissed but the more reasonable attorney in me decided to agree to continuance because now my client is bargaining in a position of strength rather than that of weakness, and that is the key to bankruptcy, controlling the situation rather than having it control you.

The answer is probably.

There are only a few reasons why you could not file your case again and most of them revolve around abuse of the system.  If your case has been dismissed with prejudice, you may not file bankruptcy again for 6 months without leave (permission) from the court.

Your case may also be dismissed with a bench order barring you from filing again for a year or longer.  I did have a man in my office who had a lifetime bar from filing bankruptcy.  I’m uncertain the Constitutionality of that, but if anyone deserved it, he did (he filed 8 cases in four year and literally held off foreclosure on his home for 5 1/2 years).

Also if you file a motion to dismiss (ask for your case to be dismissed) and it is granted, then you may not file again for six months without permission from the court.

Other than for the above mentioned reasons, you can (and sometimes should) file a new Chapter 13 bankruptcy case.  I’ve even had trustees recommend to me to recommend to a few of my clients that they let the case get dismissed and refile so they can get another swing at the bat.

If you are using a bankruptcy to stop a sheriff sale, the sale will be stayed (stopped), but there are other issues to be resolved in a second bankruptcy case filed within a year.

In the second bankruptcy case filed within a year, the automatic stay only lasts for 30 days.  Your attorney must file (and do it quickly) a motion to extend the automatic stay beyond 30 days.  The rules for this motion can be found at 11 U.S.C.  § 362(c)(3)(b).

Essentially this is a motion to ask the court to keep the automatic stay in place (stop the bank from foreclosing) as if this was the first case.  The standard the court has to see is if this case is more likely to succeed than the previous case.

This is a high standard, after all if everything were going well your first case probably would not have been dismissed.  I have filed four such motions, and in all the motions that have been filed, they have been granted, but not without some serious discussions with the bankruptcy judge.

Yes Virginia, you can file Chapter 13 bankruptcy after your first case is dismissed, but the road to confirmation is longer.

Al Capone gave his creditors an offer they couldn’t refuse.

Now I’m not suggesting that you go over to Bank of America armed with a Tommy-gun and take matters into your own hands, nor am I suggesting that you should hire someone to go to your mortgage lender to break their kneecaps (not that your lender wouldn’t do it to you if it were not for the FDCPA), but what I am suggesting is that you are not powerless in your debt situation, in fact you can give your creditors and offer they can’t refuse!

Your creditors may not be required to cooperate with you, but they must cooperate with the bankruptcy court.  Your creditors may not be required to treat you with courtesy but they must respect the bankruptcy code.

I had a client in my office this weekend who was shocked to learn that the bank must comply with a confirmed Chapter 13 bankruptcy plan.  They were also surprised to find out that the bank may not call to collect on debts once a bankruptcy case is filed.

The reality is that once a bankruptcy case is filed an automatic stay is put in place which makes it illegal for a bank to continue collection efforts.   That’s right, illegal!

Bankruptcy isn’t for everyone and some people may not even qualify, but before you go paying a small fortune to a debt settlement company or a mortgage modification, go see a bankruptcy attorney, Because only a bankruptcy attorney can give your bank an offer they can’t refuse!