In a Chapter 13 bankruptcy case, a motion to impose the stay typically arises when a debtor has filed for bankruptcy previously within one year, and the automatic stay in the subsequent case is limited to 30 days or doesn’t apply at all. To extend or impose the stay, the debtor must convince the court that the current bankruptcy filing is in good faith. Here’s a step-by-step guide on how to increase your chances of winning on a motion to impose or extend the stay:
Understand the Automatic Stay Rules:
The automatic stay is a fundamental component of bankruptcy, halting most collection activities against the debtor. In a Chapter 13 context, if you’ve had a bankruptcy case dismissed within the previous year and file again, the automatic stay will only last for 30 days unless the court extends it. If you’ve had more than one prior case dismissed, you may need to file a motion to impose the stay since it won’t automatically take effect. Understanding these nuances is crucial for strategizing your next steps and ensuring you’re protected against creditor actions.
Demonstrate Changed Circumstances:
Illustrating a significant change in your circumstances since your last bankruptcy filing is key to convincing the court to extend or impose the stay. For example, if you’ve secured a stable job after a period of unemployment or have resolved the issues that led to the dismissal of your previous case (such as non-compliance with plan payments), these are compelling changes to present. Documenting these changes with evidence like employment contracts, pay stubs, or correspondence related to resolved prior issues will strengthen your case.
Prepare Evidence of Good Faith:
The court will look for indications that your current filing is made with genuine intent to reorganize your debts and comply with the bankruptcy process. This could include your proactive engagement with a credit counseling agency, efforts to reduce discretionary spending, or even partial repayments made to creditors since your last filing. Demonstrating that you’ve attended all required meetings and are actively participating in the bankruptcy process can also support your claim of good faith.
File a Timely Motion:
Timing is critical when filing a motion to extend or impose the stay. Ensure that your motion is detailed, citing specific changes in your circumstances and how you’ve addressed issues from previous filings. If you’re facing imminent collection actions, like a foreclosure or wage garnishment, highlight these in your motion to underscore the urgency and necessity of extending the stay.
Seek Legal Assistance:
Navigating the complexities of bankruptcy law and effectively advocating for your interests can be challenging without legal expertise. An experienced bankruptcy attorney can help craft a persuasive motion, gather and present supporting evidence, and represent you at the hearing. They can also provide insights into how local courts typically handle such motions, increasing your chances of a favorable outcome.
Prepare for the Hearing:
During the hearing, be prepared to articulate the changes in your circumstances and your commitment to the Chapter 13 process. Practice explaining these points clearly and concisely. If creditors or the trustee challenge your motion, be ready to respond with factual information and maintain a focus on your efforts to comply with bankruptcy requirements and address past issues.
Comply with Chapter 13 Requirements:
Active compliance with Chapter 13 requirements demonstrates your commitment to the bankruptcy process. This includes making timely plan payments, attending required meetings and counseling sessions, and keeping the court informed of any changes in your financial situation. Showing that you’re taking your Chapter 13 obligations seriously can be pivotal in convincing the court to grant your motion.
Successfully extending or imposing the automatic stay in a Chapter 13 case hinges on demonstrating changed circumstances, good faith, and compliance with bankruptcy requirements. By thoroughly preparing and presenting a compelling case, you can enhance your chances of maintaining the stay’s protections and advancing your journey toward financial stability.
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