Articles Posted in Chapter 13 Bankruptcy

Not all bankruptcy petitions that are filed are granted. Instead, in some cases, the court will deny a petition or dismiss a case. Fortunately, however, the law allows for appeals, and in many instances, a petitioner can persuade a court to reverse its ruling and allow a bankruptcy action to proceed. In a recent California bankruptcy case, a court discussed the process of reopening a bankruptcy proceeding, highlighting the importance of following the proper procedure.  If you live in California and wish to seek relief from your debts, you should speak to a trusted California bankruptcy attorney regarding your options.

Procedural History of the Case

It is reported that the petitioner filed a motion to reopen his bankruptcy case, which was filed in 2010. The bankruptcy court denied his motion, and he appealed. He had difficulties complying with the deadlines set forth under the scheduling order for the appellate process, and the bankruptcy court’s decision was affirmed without consideration of the petitioner’s brief. He then filed a motion to reinstate his appeal so that the court could consider his brief. The court granted his motion to reinstate the appeal but, upon reviewing the materials submitted by the petitioner, the court nonetheless denied his appeal.

Reopening a Bankruptcy Case

A bankruptcy court’s denial of a motion to reopen a bankruptcy case will be reviewed by an appellate court for abuse of discretion. In assessing whether an abuse of discretion has occurred, the appellate court will conduct a two-part inquiry. First, it will review whether the bankruptcy court applied the proper legal rule to the question presented. If so, the appellate court will then consider whether the bankruptcy court applied the legal standard in a manner that is illogical, implausible, or without support, based on inferences that can be drawn from the facts of record. Continue reading

Generally, when a person files a petition for bankruptcy, an automatic stay will be entered that bars anyone from filing claims seeking damages from the party in state or federal court. In some instances, however, a bankruptcy court can lift the automatic stay, allowing litigation to proceed. Recently, a California bankruptcy court discussed what constitutes just cause for lifting a stay, in a case in which the debtor appealed a retroactive annulling of an automatic stay. If you are a California resident seeking a reprieve from your debts, it is prudent to confer with a capable California bankruptcy attorney to assess whether bankruptcy may be an option for you.

Facts of the Case

It is reported that the debtor filed a petition for Chapter 13 bankruptcy, after which the bankruptcy court issued an automatic stay. Subsequently, the defendants, who were unaware of the claimant’s bankruptcy proceedings, filed a wrongful death lawsuit against the claimant in state court. After the defendants were advised of the debtor’s bankruptcy, they moved to annul the stay in order to validate the filing of their complaint in state court and to liquidate their claims against the debtor. The bankruptcy court granted the motion and retroactively lifted the stay, after which the debtor appealed.

Grounds for Lifting an Automatic Stay in a Bankruptcy Case

Pursuant to the bankruptcy code, when a party in interest moves to lift an automatic stay and a hearing is held, a bankruptcy court must grant relief from an automatic stay upon showing of cause. Cause is not specifically defined by the bankruptcy code; rather, whether cause exists must be determined on a case by case basis. In determining whether a stay should be lifted to allow a case filed in state court to proceed, the court should assess the judicial economy, potential for prejudice, the expertise of the state court, and whether only bankruptcy issues are involved. Continue reading

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