In Rem Relief Granted Against Serial Filers

Submitted by Anonymous (not verified) on Mon, 08/19/2013 - 17:55
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In the case of In re Selinsky, 365 B.R. 260 (Bkrtcy.S.D.Fla.2007)(Ray, J.), the court dealt with a situation of five serial bankruptcy filings by the Debtor and her husband to stall a foreclosure of their real property. The mortgagee's motion for relief from the automatic stay case before the court.

The court noted that section 1307(c) permits a court to dismiss a Chapter 13 case "for cause" and that the leading case in the Eleventh Circuit is In re Kitchen, 702 F.2d 885 (11th Cir.1983) which sets forth the "totality of the circumstances" test. Based on the Kitchen factors, the court found the case to be a bad faith filing and ordered the case dismissed.

In addition to dismissing the case, the court granted the secured creditor prospective stay relief which is also known as in rem relief. This stay relief attaches to the property so that a new bankruptcy filing by the Debtor or a third party will not trigger an automatic stay. Furthermore, the court bound the Debtor's spouse by the in rem relief due to his participation in the serial filing scheme. The husband was charged with constructive notice of the hearing on the motion for stay relief.

Furthermore, the court ordered that the Debtor and her husband be barred from filing another bankruptcy case for a two year period.

It may be noted that BAPCPA added two new provisions to section 362 to validate in rem relief. New section 362(d)(4) authorizes a bankruptcy court under certain circumstances to order relief from the stay with respect to real property that is binding in any bankruptcy case purporting to affect the property filed within two years. Section 362(b)(2) creates a new exception to the automatic stay for an act to enforce a lien against real property when an order allowed by section 362(d)(4) has been entered.Jordan E. Bublick is a Miami Personal Bankruptcy Lawyer with over 25 years of experience in filing chapter 13 and chapter 7 bankruptcies. Miami Personal Bankruptcy Lawyer Jordan E. Bublick has filed over 8,000 chapter 13 and chapter 7 cases.