Two New South Carolina Bankruptcy Decisions Worth Your Attention: Stevens and Green
The U.S. Bankruptcy Court for the District of South Carolina continues to refine Chapter 13 practice through two recent opinions: In re Stevens (March 25, 2026) and In re Green (April 6, 2026). While addressing very different issues—automatic stay extension and post petition mortgage fees—both decisions reinforce a common theme: parties must meet their evidentiary burdens with precision, and procedural missteps can be outcome determinative.
I. In re Stevens: A Strict Application of § 362(c)(3)
A. The Issue: Extending the Automatic Stay in a Repeat Filing
In Stevens, the debtor filed a second Chapter 13 case within one year of dismissal of her prior case. Under 11 U.S.C. § 362(c)(3), the automatic stay was set to terminate 30 days after the petition date unless extended by the court after notice and a hearing completed within that same 30-day window.
The debtor filed a motion to extend the stay—but not immediately. Instead, she filed it two weeks after the petition date, and the hearing was scheduled after the 30-day period had already expired. Although the court entered a temporary extension to bridge the timing gap, the creditor objected on both procedural and substantive grounds.
B. The Court Focuses on Good Faith
Rather than deciding the timing issue, the court focused on whether the debtor met her burden to show the case was filed in good faith.
Because the debtor had a prior case dismissed within the preceding year, § 362(c)(3)(C) created a presumption that the new case was filed not in good faith if there had not been a substantial change in her financial or personal circumstances.
C. No “Substantial Change” in Circumstances
The debtor argued that her prior case failed due to medical issues that caused her to miss work and fall behind on plan payments. She testified that her condition had improved and was now manageable with medication.
The court was not convinced this constituted a substantial change. Importantly:
- The medical condition was ongoing, not resolved.
- Her employment, pay rate, and general financial structure remained the same.
- The increase in income was modest and tied more to fluctuating hours than any fundamental change.
As a result, the presumption of bad faith applied.
D. Failure to Rebut the Presumption
To overcome the presumption, the debtor needed to present clear and convincing evidence of good faith—a demanding standard.
The court found she failed for several reasons:
1. Questionable Budget Changes
The debtor’s updated Schedule J showed reduced expenses—especially for food and medical care. The court found these reductions unrealistic, particularly given her ongoing medical condition and the needs of a household with two dependents.
2. Inconsistent Financial Information
The debtor testified she received child support, but her schedules did not disclose it. This inconsistency undermined her credibility.
3. Lack of Evidence Supporting Increased Income
Although her reported income increased slightly, she did not adequately explain how she would consistently maintain higher earnings going forward.
4. Prepetition Conduct with the Creditor
The debtor had difficulty maintaining required insurance on her vehicle and repeatedly changed the deductible amount. The court viewed this conduct as undermining her good faith.
5. Short Time Between Filings
Only 14 days passed between dismissal of the prior case and the new filing—another factor weighing against good faith.
E. Impact on the Creditor
The court emphasized that the creditor had already incurred costs due to repossession and turnover of the vehicle and had received minimal payments. The repeat filing compounded that burden.
F. Timing Still Matters (Even Though Not Decided)
Although the court declined to rule on the timeliness issue, it issued a clear warning: motions to extend the automatic stay should generally be filed with the petition or immediately thereafter. Delays can jeopardize the ability to obtain relief, even when temporary extensions are granted. This is an important reminder to Bankruptcy attorneys to make sure the client’s motion is timely filed. The Court has put Debtor attorneys on Notice multiple times.
G. Holding
The court denied the motion to extend the automatic stay as to the objecting creditor, concluding that the debtor failed to rebut the presumption of bad faith—and, alternatively, failed even to meet a preponderance standard.
II. In re Green: Enforcing Rule 3002.1 Disclosure Requirements
A. The Issue: Are Postpetition Mortgage Fees Adequately Supported?
In Green, the debtor challenged a creditor’s Notice of Postpetition Mortgage Fees under Federal Rule of Bankruptcy Procedure 3002.1. The creditor sought $1,550 for:
- “Bankruptcy/Proof of claim fees”
- “Plan review”
- “Preparation/analysis of Official Form 410A”
The debtor argued that the notice lacked sufficient detail to determine whether the fees were reasonable.
B. Rule 3002.1: Purpose and Framework
The court reiterated that Rule 3002.1 exists to ensure transparency in Chapter 13 mortgage claims and to prevent undisclosed charges from surfacing after plan completion.
When a debtor challenges such fees under Rule 3002.1(e), the court must determine:
- Whether the fees are authorized by the underlying agreement; and
- Whether they are permissible and reasonable under applicable nonbankruptcy law.
C. Burden of Proof Lies with the Creditor
A key point in Green is that a Rule 3002.1 notice does not carry prima facie validity (unlike a proof of claim). Therefore, the creditor bears the burden of proving the fees are justified.
D. Contractual Basis Was Satisfied
The court first confirmed that the mortgage documents allowed recovery of reasonable fees, including attorney’s fees incurred in connection with bankruptcy proceedings.
This cleared the first hurdle.
E. But Reasonableness Was Not Proven
The creditor failed on the second—and critical—step: demonstrating reasonableness.
The descriptions provided were too vague. Labels like “Plan Review” and “Proof of Claim” did not explain:
- What work was actually performed
- Why legal services were necessary
- Who performed the work
- How much time was spent
- What rates were charged
The court emphasized that creditors can—and should—provide additional documentation beyond the standard form if needed.
F. Failure to Participate Was Fatal
The creditor’s position was further weakened by its complete lack of participation:
- It did not respond to debtor’s counsel’s requests for clarification
- It did not object to the motion
- It did not appear at the hearing
Under Rule 3002.1(h), the court may preclude a creditor from presenting omitted evidence when it fails to comply with its obligations. The court effectively applied that principle here.
G. Holding
The court disallowed the entire $1,550 in postpetition fees. However, it declined to award attorney’s fees to the debtor because no evidence or argument was presented to support such relief.
III. Key Themes Across Both Decisions
Although Stevens and Green address different provisions of the Bankruptcy Code and Rules, they share several important themes:
1. Evidentiary Burdens Are Real—and Enforced
- In Stevens, the debtor could not meet the heightened “clear and convincing” standard.
- In Green, the creditor failed to meet its burden of proving reasonableness.
In both cases, the party with the burden lost.
2. Courts Scrutinize Credibility and Detail
The court looked beyond surface-level assertions:
- Unrealistic budgets and inconsistent disclosures in Stevens
- Vague fee descriptions in Green
Precision and credibility mattered.
3. Procedure Can Drive Outcomes
- Delayed filing of the motion to extend the stay in Stevens nearly doomed the request (and may in future cases).
- Failure to respond or appear in Green resulted in complete disallowance of fees.
4. Practical Guidance for Practitioners
For Debtors’ Counsel:
- File motions to extend the stay immediately.
- Ensure schedules are accurate and realistic.
- Be prepared to show meaningful changes in circumstances.
For Creditors’ Counsel:
- Provide detailed, itemized descriptions of post petition fees.
- Respond promptly to inquiries and motions.
- Appear and defend challenged charges.
Conclusion
In re Stevens and In re Green serve as timely reminders that bankruptcy courts expect rigor from both sides of the aisle. Whether seeking to extend the automatic stay or recover post petition fees, success depends on meeting statutory requirements, presenting credible evidence, and following procedural rules carefully.
In short: in South Carolina bankruptcy court, details matter—and the failure to supply them can be dispositive.