Dismissal and the Automatic Stay

This question has been brought up to me recently so I thought it was appropriate to post this information and briefly review the case law. Suppose a bankruptcy is dismissed today on August 1. The debtor files a motion for rehearing or to reinstate the bankruptcy case on August 8, with a hearing set for September 6. Can the creditor proceed to try to collect on the debt pending the court hearing September 6? Yes. Could a creditor repossess the vehicle or, if there was time, finish its foreclosure prior to the hearing? Yes. And if the creditor takes such action and the bankruptcy court vacates the dismissal, must the creditor give the property back? No.

The automatic stay ends when the case is dismissed even if a motion to reinstate is filed and the court permits the reopening of the case. See In re Garcia, Case NO 04-18175, 2005 Bankr Lexis 1174(Bank. S. D. FL 2005)(J. Cristol); In re Hill, (Bankr. M.D. FL 2003), and In re Atkins, 2009 Bankr. Lexis 1869)(Bankr. N.D. AL 2009)

This issue is particularly important in Fort Lauderdale chapter 13 where a debtor might attempt to reinstate a chapter 13 plan to retain a home or vehicle.

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