People saddled with unbearable debts are often able to take advantage of the United States bankruptcy laws and seek relief by filing a petition for bankruptcy. If they do, however, they must be cognizant of any procedural rules; otherwise, their bankruptcy petitions may be dismissed. For example, the Bankruptcy Code provides, among other things, that people cannot seek simultaneous relief for the same debt in different courts by filing multiple bankruptcy petitions. This principle was highlighted in a recent ruling issued by a California court in a bankruptcy case, in which the court ultimately affirmed the dismissal of the debtor’s bankruptcy petition filed in California court. If you have substantial debt and you have questions about what relief may be available, it is in your best interest to contact a California bankruptcy lawyer to discuss your options.
History of the Case
It is reported that the debtor initiated a voluntary Chapter 11 petition in the United States Bankruptcy Court for the Central District of California in June 2023. Five days later, the Bankruptcy court issued an order dismissing the case on the grounds that the debtor had another bankruptcy action pending in Oregon. The debtor then appealed.
Grounds for Dismissing Bankruptcy Cases
On appeal, the court considered the Supreme Court ruling in Freshman v. Atkins, which established that a debtor cannot have concurrent bankruptcy cases involving the same debts. The court cited precedent supporting this principle, emphasizing that only one bankruptcy case may be pending for a debtor at a given time. Consequently, the court found that the Bankruptcy court properly dismissed the case because the debtor already had an open Chapter 7 bankruptcy proceeding in the United States Bankruptcy Court for the District of Oregon.