The Florida Bar Journal: Dicing It Up: Does A Sliver of the Automatic Stay Remain For Repeat Debtors?

Articles / Publications

The automatic stay, which gives debtors a breathing spell from creditors, is one of the most “fundamental debtor protections” in bankruptcy.[1] Offering broad protection for debtors, the automatic stay ordinarily springs into effect upon the filing of a bankruptcy petition. Because of perceived abuses of the bankruptcy process, however, Congress altered the automatic stay for repeat bankruptcy filers when it enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). Now, for individual debtors who had a previous case pending within the preceding year, the automatic stay goes into effect for only 30 days.[2] On the 30th day, if the debtor or a party in interest does not move to extend the stay, the stay shall “terminate with respect to the debtor.”[3]

This phrase — “with respect to the debtor” — has caused a split among courts as to how it limits the termination of the automatic stay for a repeat bankruptcy filer under Bankruptcy Code §362(c)(3)(A). Some courts view that language as terminating the stay as to the debtor and property of the debtor — but not as to property of the estate.[4] As one bankruptcy judge refers to it, a “sliver of the stay” remains to protect property of the bankruptcy estate.[5] Other courts hold that the stay is terminated in its entirety, including as to property of the estate.[6] Although the First Circuit has recently rejected the “majority” view and held that no “sliver of the stay” remains, the 11th Circuit has not yet addressed the issue. And bankruptcy courts within the 11th Circuit remain divided. This uncertainty over what, if any, automatic stay remains after termination has vast implications for violations of the automatic stay under §362(k)(1).[7]

To read the full article, click here.

Related Professionals

Burr
Jump to Page
Arrow icon Top

Contact Us

We use cookies to improve your website experience, provide additional security, and remember you when you return to the website. This website does not respond to "Do Not Track" signals. By clicking "Accept," you agree to our use of cookies. To learn more about how we use cookies, please see our Privacy Policy.

Necessary Cookies

Necessary cookies enable core functionality such as security, network management, and accessibility. These cookies may only be disabled by changing your browser settings, but this may affect how the website functions.


Analytical Cookies

Analytical cookies help us improve our website by collecting and reporting information on its usage. We access and process information from these cookies at an aggregate level.