Bankruptcy Blogs

Fannie Mae today announced plans to bar you from getting a mortgage for seven years, if you walked away away from a house (let it foreclose) when you had the capacity to pay or did not complete a workout alternative in good faith.

The Automatic Stay.

It is one of the greatest and most powerful provisions of the Bankruptcy Code. If sections of the Bankruptcy Code were literary characters, the Automatic Stay would be a superhero.

The Automatic Stay comes from section 362 of the Bankruptcy Code. Section 362 provides that the commencement of a bankruptcy case stays pretty much any action that creditors can take against a debtor or the debtor’s property.

So, actions to collect a debt? Stopped.

Wage garnishments? Stopped.

Commercial landlords and insolvency practitioners are all alive to the effects of the decision of HHJ Purle QC in Goldacre (Offices) Ltd v Nortel Networks UK Ltd [2009] EWHC 3389 (Ch) (07 December 2009), that rent is an administration expense...