Be Prepared When Filing Bankruptcy To Save Your Home From Foreclosure

If you file bankruptcy you need to actively participate in their bankruptcy cases.  It is ill advised to file bankruptcy and not complete bankruptcy documents, attend meeting of creditors and to ignore legal papers. Chances are high the bankruptcy case will be dismissed by the court.  With the dismissal, the court's order that stops creditors from collecting money, or foreclosing on a house terminates.

Typically, must bankruptcy petitioners have nothing to be concerned because they have hired a competent professional to guide them through the process.  However, there are some folks that hurry up and rush to file their case to stop a wage garnishment or foreclosure of a house.  As a result of the rush, further paperwork needs to be completed.  If it is not completed the court will dismiss the case.

Once the case is dismissed under these circumstances, the bankruptcy code provides that no individual may be a debtor within 180 days.  (11 U.S.C. § 109(g)(2).)  Like all rules, there some courts provide exceptions if no creditor would be harmed by the refiling of the bankruptcy case, or if a creditor acted in bad faith.    

There is really no exception for the bankruptcy petition that decides he is going to not to play fairly.  For example, are those debtors that file multiple chapter 13 bankruptcy cases to avoid property foreclosures.  In re Rivera, 494 B.R. 101, 104 (B.A.P. 1st Cir. 2013), a debtor filed a second bankruptcy case right after he had his case voluntarily dismissed.  He had the case dismissed because the Court issued an order allowing the bank to continue with the foreclosure because debtor did not make monthly payments.  On the same day that he dismissed his first case, the debtor filed a new chapter 13 case to obtain a new order that prevented foreclosure.  The bank obtained an order dismissing the second bankruptcy case.

In Rivera demonstrates that a debtor cannot circumvent an order granting a creditor relief from the automatic stay by dismissing his bankruptcy case and filing a new case.  It is important for debtors to actively participate in their bankruptcy cases.  Secured creditors will be able to prevent a debtor from dismissing his case in an attempt to continually frustrate the creditor’s legitimate attempts to foreclose on its collateral.    

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