Document Type

Article

Abstract

When a petition is filed commencing a case under the Bankruptcy Code, the petition alone stays certain acts against the debtor, the debtor's property, or property of the bankruptcy estate. The Code has always provided that, absent favorable judicial action on an application to lift the stay, the automatic stay remains in effect with respect to an act against property of the estate until the property is no longer property of the estate, and with respect to any other act until the case is closed or dismissed or a discharge is granted or denied. But in the amendments to the Bankruptcy Code enacted in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Congress adopted new provisions terminating the stay automatically, without judicial order, when the debtor has had other bankruptcy cases pending within the preceding one-year period - provisions one might characterize as creating an "exploding" stay. In this article, I will examine the new amendments to § 362(c)(3) of the Bankruptcy Code and the interpretative difficulties they are causing. I will suggest that some bankruptcy courts are using the inartful drafting of the amendments to justify a reading of the provisions patently contrary to legislative intent. Although the bankruptcy bar and bench have leveled much criticism at the 2005 amendments, especially at their impact on consumer bankruptcy, the courts' reading of the statute too often appears to be an effort to thumb their collective noses at Congress and undermines the goals the legislation sought to achieve.

Disciplines

Bankruptcy Law

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