CHAPTER 2, C. Section 109(g)(2) Requires Only a Sequential Analysis for Purposes of Eligibility After a Voluntarily Dismissed Case

• Jurisdiction: United States

C. Section 109(g)(2) Requires Only a Sequential Analysis for Purposes of Eligibility After a Voluntarily Dismissed Case

ABI Journal

August 2019

Elizabeth L Gunn¹

Virginia Office of the Attorney General

Richmond, Va.

Section 109(g)(2) of the Bankruptcy Code was originally added by the 1984 amendments and, notably, was not modified in any substantive way by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) (which only modified subsections (f)(2) to (g)(2)). The language of subsection (g)(2) is entirely straightforward, prohibiting a debtor from being a debtor under title 11 if at any time in the preceding 180 days that debtor "requested and obtained the voluntary dismissal of the [previous] case following the filing of a request for relief from the automatic stay."²

Breaking the text down, each of the elements is required for the prohibition, and each requires only an objective analysis of the facts and circumstances in the proposed debtor's prior case to determine whether the element has been satisfied. There are objective questions. Did the proposed debtor request a voluntary dismissal in its prior case? Was the proposed debtor's prior case dismissed on their request for voluntary dismissal? Was a motion for relief from the automatic stay filed in the previous case? Did the request and dismissal follow the filing of the motion for relief? Applying an objective analysis of the dates of each element, if the answers to each of these questions is "yes," then the proposed debtor is subject to § 109(g)(2)'s 180-day bar from the eligibility to file a case under title 11.

Despite the presumptively straightforward language, courts have questioned the application of this simple formula due to the term "following." Since the passage of the 1984 amendments, and particularly since BAPCPA's passage and its additional limitations on debtors, a split of authority as to the definition of "following" has developed, with two primary schools of thought: a sequential analysis utilizing the definition of "after," or a more subjective, causal analysis utilizing the definition of "as a result of."

Admittedly, the sequential analysis can result in harsh results for debtors under some circumstances. However, this does not mean that words or additional subjective factors should be read into the Code. Applying a sequential application is consistent with both statutory interpretation as well as congressional intent.

The sequential position is further...