The Debtors Filed 10 Bankruptcy Cases to Delay the Foreclosure
A decision issued Monday by Judge Alan S. Trust, sitting in the Central Islip Bankruptcy Court for Eastern District of New York, outlined the excessive measures taken by two Long Island debtors who filed a total of ten bankruptcy petitions over a 12 year period in an effort to stop the foreclosure of their jointly-owned home.
Most of these bankruptcy filings were Chapter 13 cases filed over a four-year period between 2005 and 2009. Almost all of them were filed on the eve of a scheduled foreclosure sale.
Judge Trust issued the decision in each of two separate cases: In re Janet Blair (Case No. 09-76150-ast) and In re Allen Gary Smith (Case No. 09-77562-ast).
The decision was precipitated by a motion brought by Barbara Dunleavy, Esq. of the Nassau County foreclosure law firm, Rosicki, Rosicki & Associates, in which she sought in rem relief against the premises, located in Wyandanch, New York.
“In Rem” Relief in Bankruptcy Proceedings
“In rem” relief is when a mortgagee seeks a court order indicating that the bankruptcy stay that arises in any further bankruptcy cases will not affect a particular piece of property. At the conclusion of the hearing on the mortgage company’s motion, which occured on November 24, 2009, Judge trust lifted the stay to enable the mortgagee to proceed, but reserved decision on the issue of granting in rem relief.
At that bankruptcy court hearing , Mr. Smith conceded that he was really looking to stay in the house for as long as he could. That did not bode to well for the the debtors, as the judge concluded that the serial filings were evidence of the debtors’ bad faith, and also evidendce of the fact that the debtors were abusing the bankruptcy process for several years.
The decision issued yesterday, which granted in rem relief, will now make any further bankruptcy filings by these debtors or any others useless, as far as staying the pending foreclosure proceeding.
It was interesting that Judge Trust did not sanction the debtors for their conduct.
More Posts and Articles About In Rem Bankruptcy Relief to Follow
In his decision, Judge Trust provided an interesting and detailed discussion about the law which enables a bankruptcy court to grant in rem relief. I will likely make that the topic of my January 2010 article which will be published in the Suffolk Lawyer , and I will discuss the new statutory aspects set forth in BAPCPA as well as case authorities for granting in rem relief.