Opinion
C/A No. 06-01540-JW.
May 16, 2006
ORDER
This matter comes before the Court upon a Motion to Extend Stay ("Motion") filed by Barbara Jean Elbert ("Debtor") pursuant to 11 U.S.C. § 362(c)(3)(B). Debtor served the Motion and Notice of Hearing on all creditors. The Chapter 13 Trustee filed a response.
Internal references to the Bankruptcy Code ( 11 U.S.C. § 101 et. Seq.), as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, shall be made by section number only.
Debtor was a debtor in two prior Chapter 13 bankruptcy cases. Debtor's first bankruptcy case (C/A No. 01-8347) was dismissed for non-payment to the Chapter 13 Trustee on May 30, 2003. Debtor's second case (C/A No. 03-10212) was dismissed for non-payment, under the terms of a confirmed plan, on September 22, 2005. This previous case was pending within a one (1) year period preceding a filing of this current case. Therefore, pursuant to § 362(c)(3)(A), the automatic stay provided by § 362(a) is scheduled to terminate on May 17, 2006, the thirtieth day (30th) day after Debtor filed this current bankruptcy case. Under § 362(c)(3)(C)(i)(II)(cc), there is a presumption that Debtor did not file this case in good faith. In light of the presumption that Debtor filed this current case with a lack of good faith, Debtor must demonstrate, by clear and convincing evidence, that she filed this case in good faith in order to extend the stay beyond May 17, 2006.
In the previous case, Debtor suffered a loss of income when she was unemployed for a six month period. This period of income loss resulted in the dismissal of Debtor's previous case. Since the dismissal of the previous case, Debtor has returned to work and is receiving child support from her estranged husband. Debtor is also now earning income from a part-time job. The Court has previously extended the automatic stay where a debtor's previous case failed because the debtor experienced a period of unemployment and has since found employment sufficient to enable the debtor to make the proposed plan payments. In re Williams, C/A No. 06-00306-W, slip op. (Bankr. D.S.C. Feb. 24, 2006) (extending stay where debtor was unemployed after his truck was damaged).
Debtor's initial schedules and testimony also appeared to indicate that there is substantial equity in her home; however, Debtor later amended her schedules to indicate that there was no equity in her home. The accuracy of a debtor's schedules and statement of financial affairs is essential to the preparation of the Court and trustees for these types of motions. Parties in interest are entitled to rely on these sworn documents when ascertaining their rights and an appropriate course of action. The Court is unfortunately finding that many schedules, when put to scrutiny, are seriously flawed especially with respect to the accuracy of a debtor's assets and income. In the future, the Court may deny motions to extend the stay if the moving debtor's schedules and statement of financial affairs are not accurate when a hearing is held on the motion, whether or not such defect is attributable to a debtor or their counsel. Despite this inaccuracy in Debtor's initial schedules, it appears from Debtor's testimony that she has sufficient income to make the proposed plan payment. At this time early in the case, there is no reason to conclude that Debtor's case will not result in a confirmed plan that will be fully completed.
Based on all of the totality of the circumstances in this case, the Court finds that Debtor has met her burden of proof and that this case is filed in good faith. It is therefore ordered that the automatic stay is extended as to all creditors pursuant to § 362(c)(3)(B). As a condition for extending the automatic stay and with the agreement of Debtor, that should this case be dismissed for any reason, dismissal shall be with prejudice as to any subsequent filing by Debtor under Chapters 11, 12 and 13 of the Bankruptcy Code for a period of one (1) year. The automatic stay in this case shall terminate, without further order, if Debtor does not have a plan confirmed in this case on or before August 4, 2006. The Trustee shall condition confirmation on Debtor demonstrating that her plan is feasible and that she has sufficient stable income to make the proposed plan payment and to meet her living expenses.
The Court's findings are limited to the context of this Motion and nothing in this Order shall be construed as res judicata to prevent Debtor, the trustee, or any party in interest from challenging or establishing that this case or plan was filed or proposed in good faith for purposes of 11 U.S.C. §§ 1307 or 1325. See In re Charles, 332 B.R. 538, 542 (Bankr. S.D. Tex. 2005) (holding that Congress, by enacting § 362(c)(3), intended the courts to conduct an early triage of a case and determine whether a case is doomed to fail or whether a case has a reasonable likelihood of success.)