DISMISSED CHAPTER 13 CASE FINDING | Key Points

Updated: Mar 21

The U.S. Bankruptcy Court for the Western District of Kentucky finally put an end to debtor Helen Mitchell’s abuse of the bankruptcy process by the court’s recent Memorandum-Opinion which included a two-year bar on subsequent bankruptcy filings or stays. In re Mitchell, Case No. 19-31949(1)(13), 2021 WL 2546670, at *5 (Bankr. W.D. Ky. June 21, 2021).
Mitchell executed a note and mortgage in 1999 and later defaulted under the terms of the note and mortgage. US Bank initiated foreclosure proceedings in 2013 and obtained a foreclosure judgment in 2016. The clerk rescheduled the foreclosure sale eight times between January 2018 and June 2019 due in part to Mitchell filing multiple bankruptcy petitions. After Mitchell successfully reinstated her third Chapter 13 bankruptcy, US Bank moved for stay relief and to dismiss the bankruptcy case due to Mitchell’s abuse of the bankruptcy process.
Upon reviewing Mitchell’s multiple bankruptcy cases, the court concluded Mitchell’s bankruptcy history comprised “a textbook portrait of delay, abuse and bad faith resulting in an abuse of the bankruptcy process.” The court dismissed Mitchell’s Chapter 13 bankruptcy case with prejudice and entered an order prohibiting Mitchell from filing a new bankruptcy petition that would stay US Bank’s foreclosure efforts. We are hoping the Western District’s hard stance in this case will be adopted by other court and put an end to debtors’ abusive bankruptcy practices.