Consumer Bankruptcy

No Second Chances Debtors Prohibited from Filing a Second Petition within 180 Days

By:  Brian J. Adelmann

St. John’s Law Student

American Bankruptcy Institute Law Review Staff

 

Recently, in In re Rivera,[1] the Bankruptcy Appellate Panel of the First Circuit held that the debtor was prohibited from filing a second bankruptcy case within 180 days of voluntarily dismissing his first case.[2]  The debtor filed his first chapter 13 bankruptcy case on the eve of foreclosure of real property that he owned, which was encumbered by a mortgage.[3]  The secured creditor moved for relief from the automatic stay on the grounds that the debtor failed to make post-petition mortgage payments.[4]  After the debtor failed to file a timely response to the motion, the bankruptcy court granted the secured creditor relief from stay.[5]  Subsequently, the debtor voluntarily dismissed his bankruptcy case.[6]  On the same day that he dismissed his first case, the debtor filed a new chapter 13 case.[7]  The bankruptcy court granted the creditor’s motion to dismiss the second petition pursuant to section 109(g)(2) of the Bankruptcy Code, which provides that no individual may be a debtor in a bankruptcy case if such individual voluntarily dismissed a bankruptcy case within the preceding 180 days.[8]  The Bankruptcy Appellate Panel of the First Circuit affirmed the bankruptcy court.[9]