180 Day Bar to Subsequent Bankruptcy Filing

Usually individuals can refile bankruptcy cases after they are dismissed, despite there being limitations on the automatic stay in some circumstances with multiple filings. However, there is an important limitation found in Section 109(g) of the Bankruptcy Code. In cases in which a debtor has voluntarily dismissed his case after the filing of a motion for relief from stay a 180-day bar to refiling is imposed. Also, when a debtor fails to appear in Court or willfully disobeys orders of the Court, the same bar can be imposed. It is often unknown whether the events leading up to a dismissal are a “willful failure of the debtor to abide by orders of the court.” The Court may make a specific finding of willfulness at the same time as dismissal and state it on the record or in the written order of dismissal. However, the Court may remain silent on the issue. In that circumstance, a creditor or other party in interest can raise the issue upon refiling and seek a determination of the Court on the willfulness issue in the subsequent case. The import of this is that it is usually worthwhile (for this and other reasons) to seek to keep a first bankruptcy case alive and successful.