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The Bankruptcy StrategistFeaturesBankruptcyCivil ProcedureLitigation

Bankruptcy Court Says Bankruptcy Case Is 'Filed' When Uploaded, Not Stamped

By Lawrence J. Kotler and Drew S. McGehrin
September 01, 2023

"Mere minutes can be the difference between saving one's home … or losing that home to a foreclosure." With this statement, the U.S. Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) summed up the importance of the determination as to when a bankruptcy case is actually filed of record, thereby triggering the imposition of the automatic stay. In In re Francisco Procel, Case No. 23-10697-CGM (Bankr. S.D.N.Y., July 25, 2023), Docket No. 47, the Bankruptcy Court thoroughly examined this issue and found that the "upload" time of a bankruptcy filing — and not the time physically "stamped" on a bankruptcy petition — determines when a case is commenced. In doing so, the Bankruptcy Court offered direction and guidelines that debtors and creditors will be well advised to observe in future cases.

Facts and Procedural History

In this case, the debtor filed for relief under Chapter 13 of the Bankruptcy Code on May 2 — the same day that a foreclosure sale was scheduled to be held on an investment property the debtor owned. The foreclosure sale was scheduled to commence at 2 p.m., proceeded as planned, and concluded by 2:05 p.m. The debtor's bankruptcy petition, however, bore a "time stamp" of May 2 at 2:25 p.m. — 20 minutes after the foreclosure sale concluded.

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