{"id":4660,"date":"2025-03-13T10:25:54","date_gmt":"2025-03-13T10:25:54","guid":{"rendered":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-extension-automatic-stay\/"},"modified":"2025-03-13T10:25:54","modified_gmt":"2025-03-13T10:25:54","slug":"bankruptcy-extension-automatic-stay","status":"publish","type":"post","link":"https:\/\/usatrustedlawyers.com\/blog\/bankruptcy-extension-automatic-stay\/","title":{"rendered":"Bankruptcy \u2013 Extension \u2013 Automatic stay"},"content":{"rendered":"\n
\n
\n
Listen to this article<\/div>\n<\/div>\n

Where a debtor filed a motion to extend the automatic stay, an order denying that motion should be upheld because the debtor \u2014 whose prior Chapter 13 case was dismissed for failure to make plan payments \u2014 failed to demonstrate that he filed the current case in good faith.\n<\/p>\n

\u201cThe chapter 13 debtor, Steven T. Carrigan, Sr. (the \/Debtor\u2019), who had a prior chapter 13 case which was dismissed for failure to make plan payments, appeals from the bankruptcy court\u2019s June 21, 2024 order in his current case denying his motion to extend the automatic stay under \u00a7362(c)(3). Finding no abuse of discretion by the bankruptcy court in declining to extend the automatic stay, we affirm. \u2026\n<\/p>\n

\u201cThe Debtor argues that the bankruptcy court erred in denying an extension of the automatic stay. Although the Debtor recognizes there was a statutory presumption that he did not file the Current Case in good faith, he argues that the bankruptcy court determined he had not rebutted the presumption, \u2018based on an apparent conclusion that there was no possibility that he could ever obtain confirmation of a chapter 13 plan and fully perform it\u2019 and that the bankruptcy court violated his due process rights in doing so. \u2026<\/p>\n

\u201cAs stated previously, to prevail on a motion to extend the stay under \u00a7362(c)(3)(B), the debtor must show the second case was filed in good faith as to the creditors being stayed. \u2026\n<\/p>\n

\u201cThe Bankruptcy Code does not specify how a debtor can rebut a presumption of bad faith if it arises. \u2026\n<\/p>\n

\u201cOne thing is evident from the case law: \u2018Although there is no one test for good faith, the [c]ourt \u201cmust be satisfied that the plan in the new case will succeed where the plan in the prior case did not.\u201d\u2019 \u2026<\/p>\n

\u201cHere, the bankruptcy court, expressing concern about the Debtor\u2019s performance in the First Case, stated that for the Debtor to prevail on his Motion to Extend Stay, he needed to show there was a \u2018change of circumstance\u2019 or a \u2018substantial likelihood of a confirmable plan,\u2019 which are the statutory standards found in \u00a7362(c)(3)(C)(i)(III). As the First Circuit has not articulated a standard for determining good faith under \u00a7362(c)(3), and there is well-reasoned case law beyond our circuit supporting the bankruptcy court\u2019s approach as discussed above, we conclude that the bankruptcy court employed a proper standard when considering the Motion to Extend Stay. Thus, we now examine whether the bankruptcy court\u2019s ultimate determination that the Debtor failed to demonstrate he filed the Current Case in good faith is supported by the record. \u2026\n<\/p>\n

\u201c\u2026 Whether or not the Debtor\u2019s employment constituted a substantial change in circumstances, it is evident from the record that, despite his increased income, the Debtor did not establish he was likely to confirm and fully perform a plan. \u2026\n<\/p>\n

\u201c\u2026 As discussed below, the bankruptcy court reasonably concluded that the Amended Plan was patently unconfirmable and the record supports the court\u2019s conclusion that there was no realistic prospect that the Debtor could confirm any plan and fully perform it. \u2026\n<\/p>\n

\u201cHere, as the Amended Plan did not provide for full payment of the priority tax claims as required by \u00a71322(a)(2), it was unconfirmable. \u2026\n<\/p>\n

\u201c\u2026 Here, each of the plans proposed by the Debtor were patently unconfirmable because they failed to provide full payment for the priority tax claims. \u2026\n<\/p>\n

\u201cFurther, there were other factors in the record that supported a determination that the Debtor\u2019s Current Case did not have a reasonable probability of success. \u2026\n<\/p>\n

\u201cFor these reasons, the record supports a determination that the Debtor failed to establish by clear and convincing evidence \u2014 or even by a preponderance of the evidence \u2014 that the Current Case was likely to conclude with a confirmed plan which the Debtor could fully perform. We conclude, therefore, that the bankruptcy court did not err in determining that the Debtor did not establish good faith in the filing of his Current Case or abuse its discretion in denying the Motion to Extend Stay.\u201d\n<\/p>\n

In Re: Carrigan, Steven T., Sr. (Lawyers Weekly No. 03-002-25) (22 pages) (Godoy, J.) Appealed from a decision by Bostwick, J., in the U.S. Bankruptcy Court for the District of Massachusetts. David G. Baker on brief for the appellant debtor (BAP No. MB 24-012) (Feb. 18, 2025).<\/i>\n<\/p>\n

Click here to read the full text of the opinion.\n<\/p>\n

<\/div>\n","protected":false},"excerpt":{"rendered":"

Listen to this article Where a debtor filed a motion to extend the automatic stay, an order denying that motion should be upheld because the debtor \u2014 whose […]<\/p>\n","protected":false},"author":1,"featured_media":4661,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[116],"tags":[4124,128,5065,2691],"class_list":["post-4660","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bankruptcy","tag-automatic","tag-bankruptcy","tag-extension","tag-stay"],"_links":{"self":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/4660","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/comments?post=4660"}],"version-history":[{"count":0,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/posts\/4660\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media\/4661"}],"wp:attachment":[{"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/media?parent=4660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/categories?post=4660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/usatrustedlawyers.com\/blog\/wp-json\/wp\/v2\/tags?post=4660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}