By: Armando Nozzolillo and Michael S. Waskiewicz
Ordinarily, when a debtor files a chapter 13 bankruptcy petition, the automatic stay is triggered immediately. The stay prohibits lenders from pursuing any claim against the debtor unless they seek and are provided relief from the automatic stay. However, lenders should be aware of certain scenarios where the automatic stay may expire without the need to file a motion for relief from stay.
Section 362(c)(3) of the Bankruptcy Code (the “Code”) limits the duration of the automatic stay in situations where an individual had a bankruptcy case pending and dismissed within one year of filing a new chapter 13 bankruptcy case. In these situations, the automatic stay applies until the 30 th day after the second bankruptcy filing date. Debtors can try to extend the automatic stay by filing a motion for continuation of the automatic stay. However, a hearing on such a motion must be completed before the 30-day time period expires.