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What Automatic Stay?

By David L. Buchbinder
October 30, 2006

Among the abuses of the bankruptcy system to be remedied by The Bankruptcy Abuse Prevention Consumer Protection Act of 2005 (BAPCPA) is that of serial filing. In re Mark, 336 B.R. 260 (Bankr. D. Md. 2006) described a serial filer as: ' ' a person who files time and time again just to daisy-chain automatic stays to the detriment of creditors, but without any real prospect and intent to reorganize.'

To confront this issue, BAPCPA has primarily revised ' 362 of the Bankruptcy Code by significantly amending ' 362(c)(3), and adding a new ' 362(c)(4). Lest there be any doubt that these provisions have this intent, ' 302 of the BAPCPA statute is entitled: 'Curb Abusive Filings.' The very first reported case analyzing these provisions, In re Charles, 332 B.R. 538 (Bankr. S.D. Tex. (2005)), observed:
' ' Congress intended to direct the court to conduct an early triage of refiled cases. Debtors whose cases are doomed to fail should not get the benefit of an extended automatic stay.' As of mid-April 2006, approximately 30 cases had been published interpreting these new provisions, making this area one of the more hotly litigated BAPCPA amendments to the Bankruptcy Code.

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