Maine Bankruptcy Judge Rules That § 362(c)(3)(A) Automatically Terminates Automatic Stay

by PretiFlaherty

In the recent opinion of In re Smith, the Maine Bankruptcy Court (Fagone, J.) held that the termination of the automatic stay under 11 U.S.C. § 362(c)(3)(A) extends to the debtor, the debtor’s property, and property of the estate, disagreeing with the First Circuit Bankruptcy Appellate Panel.

The facts of the case are not complicated. In December 2014, Leland S. Smith, Jr., filed a voluntary petition under Chapter 13. In November 2016, Smith’s case was dismissed for failure to make plan payments. On December 28, 2016, Smith filed another voluntary petition under Chapter 13, putting Smith into the more restrictive gauntlet Congress crafted for repeat bankruptcy filers. Section 362(c)(3)(A) terminates the automatic stay after thirty days for debtors who file more than one case in a year unless a request is made to extend the stay.
Smith did not request an extension of the stay, perhaps relying on the First Circuit Bankruptcy Appellate Panel’s rulings, which agree with the majority rule that the § 362(c)(3)(A) stay termination relates only to the debtor and the debtor’s property, and not property of the estate. In other words, property that is owned by the debtor at the time of the bankruptcy filing was protected by the automatic stay and prevented creditors, even for repeat filers, from seeking to recover against a debtor’s prepetition assets.
Maine Revenue Services, apparently having some doubts as to the extent of the stay, sought an order from the bankruptcy court under § 362(j), confirming that the automatic stay had terminated so that it could pursue its collection efforts against the debtor for past due taxes. Smith opposed that relief, arguing that the court should follow the First Circuit BAP and majority rule.
However, after a survey of the case law on the issue, the bankruptcy court analyzed §362(c)(3)(A) in the context of the automatic stay provisions of the Bankruptcy Code, finding that the majority view focused on only a small part of the statute. The court also was persuaded by the reasoning of In re Daniel, 404 B.R. 318 (Bankr. N.D. Ill. 2009), because:
  1. the subsection references subsection 362(a) in whole, not parts of it;
  2.  the reference to “with respect to the debtor” in § 362(c)(3)(A) meshes with prior parts of § 362(c), which discuss the debtor in the context of single or joint cases; and
  3.  the legislative history supports the minority view in that Congress was concerned about repeat filers interfering with creditors exercising their state court rights.
The court ultimately ruled that the automatic stay had terminated with respect to the debtor, the debtor’s property, and property of the estate.

Unless overturned on appeal, this ruling alters the landscape in Maine for creditors and debtors where the debtor is a repeat filer. Creditors now seem to have an advantage unless the debtor acts quickly to extend the automatic stay. Debtors and trustees will also have to be wary in such cases as a valuable protection of bankruptcy is eliminated for property of the estate, making the property vulnerable to attack by creditors.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© PretiFlaherty | Attorney Advertising

Written by:


PretiFlaherty on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.