In 1984, Congress enacted section 109(g)(2) of the Bankruptcy Code for the purpose of curbing the abuse of repetitive bankruptcy filings by debtors. Section 109(g)(2) provides that an individual may not be a debtor if the debtor requested and obtained a voluntary dismissal of a previous bankruptcy case at any time in the preceding 180 days. The typical scenario that section 109(g)(2) is intended to prevent a debtor from voluntarily dismissing his bankruptcy case and subsequent refiling of a new case in order to prevent a creditor from acquiring relief from the automatic stay. The statute gives secured creditors a 180-day window to pursue state law remedies free from the automatic stay. Courts have struggled with the question of whether to apply section 109(g)(2) to factual situations that are within the provision’s literal language but are not the type of situation that Congress intended to cover when it enacted section 109(g)(2). Although the language of section 109(g)(2) appears to be straightforward, courts are divided on its proper application.
Courts have adopted three approaches for applying section 109(g)(2): (1) the mandatory approach, (2) the discretionary approach, and (3) the casual connection approach. Consequently, there is uncertainty for debtors, creditors, and trustees on how this provision is applied.
This Article will discuss the different approaches courts have taken when applying section 109(g)(2). Part I will discuss the mandatory approach. Part II will discuss the discretionary approach. Part III will discuss the causal connection approach. Part IV will analyze the different approaches to interpreting section 109(g)(2).