Document Type
Research Memorandum
Publication Date
2014
Abstract
(Excerpt)
Section 362 operates to create an automatic stay upon the filing of a bankruptcy petition. The automatic stay, among other things, prevents a debtor’s creditors from seeking to enforce a judgment against a debtor or against property of the estate, taking any act to obtain possession of property of the estate, or taking any act to create or enforce a lien. Section 362, however, does contain numerous provisions that provide for limitations to the automatic stay.
Among these provisions is section 362(c)(3)(A), which provides in relevant part that “if a single or joint case is filed by or against a debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed . . . the stay . . . with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case.” There is a court split regarding whether section 362(c)(3)(A) terminates the entire automatic stay or just the stay with regards to the debtor.
Recently, in In re Williford, the court considered whether the section 362(c)(3)(A) terminates the entire automatic stay or just the stay with regards to the debtor. Adopting the majority approach, the Williford court held that the phrase “with respect to the debtor,” found in section 362(c)(3)(A), limits the termination of the automatic stay to the debtor and the debtor’s property. Alternatively, the minority approach, as discussed below in In re Reswick, holds that section 362(c)(3)(A) operates to terminate the automatic stay in its entirety.
Part I of this Article will discuss the relevant provisions of the Bankruptcy Code. Part II will discuss the holding in In re Williford and some relevant facts. Part III will discuss the minority approach, as discussed in In re Reswick. Park IV will discuss the implications of each approach and any issues that may remain.