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For Paul Stenstrom, bankruptcy pays off — again and again and again

Tampa Bay's most prolific bankruptcy filer is at it again.

On Nov. 10, just weeks after a two-year ban expired, Paul Stenstrom of Tarpon Springs filed another bankruptcy petition — his 15th since 2002.

Stenstrom — whose prior filings blocked foreclosure on his home for 12 years — is now trying to stop eviction from a townhouse he rents.

The self-described "consultant'' has had so many case numbers assigned to him over the years that it makes for "a big, thick, dense block of text'' on the court docket, commented Tampa bankruptcy Judge Catherine Peek McEwen. "I've never seen this many.''

Stenstrom, who answered a knock on his door Friday morning, blamed his current financial difficulties on health problems.

"I've had seizures,'' he said. "I was ready to make a payment when I had a seizure.''

According to his most recent petition, he owes a total of $7,800 in delinquent rent on the two-story, canal-front townhome in the Callista Cay complex. The petition lists the monthly rent as $2,200, making him more than three months in arrears.

Stenstrom's current residence is a few miles from the house he and his wife bought in 2001. In less than a year, they stopped making payments, the bank started to foreclose and Stenstrom filed his first bankruptcy petition in 2002.

A bankruptcy filing automatically halts foreclosures and other debt-collection activities, a provision of the law that enabled the Stenstroms to remain in their home rent-free for the next 12 years.

Every time the bank got a final judgment of foreclosure and an auction was scheduled, Stenstrom would file a bankruptcy petition to block the sale. A judge then would dismiss Stenstrom's case because he hadn't submitted the required documents, the bank would resume foreclosing, and so on and so forth.

Stenstrom also took advantage of the fact that there are no limits on how many bankruptcy petitions an individual can file. Judges, though, can bar debtors from refiling for a certain period of time if they are deemed "serial abusive filers'' who try to game the system and stay in their homes without paying.

On Sept. 20, 2013, Judge Michael Williamson accused Stenstrom of "abusing the bankruptcy process'' and barred him from refiling before Sept. 20 of this year. The bank finally repossessed the Palm Harbor home, and Stenstrom, his wife, three daughters and four cats took up residence in the townhouse.

In his newest filing, submitted less than two months after the ban expired, Stenstrom lists assets of $16,710 and liabilities of $68,620. Most of that is in taxes owed the IRS and child support dating back to 1987 in Texas.

McEwen, who is not assigned to Stenstrom's pending case, said serial filers are not necessarily abusing the system.

"If they sit out for two years and this is a continuing pattern of what they did before, a judge might still view it as abusive,'' she said. "But it depends on why they need the current bankruptcy. Let's say the IRS came down on a debtor who had been the subject of a bar order. The reason then might have been the foreclosure issue but now they have a tax problem not associated with foreclosure. It's a different problem.''

Like Stenstrom's previous petitions, the most recent one was filed under Chapter 13 in which the debtor agrees to repay creditors under a court-approved plan. Stenstrom has never had a plan approved, and his 15th petition indicates that any new plan for paying delinquent rent and other debts depends heavily on his family's help.

"Daughters are starting part-time jobs so will help some on expenses,'' Stenstrom wrote. "Wife just started working, has not helped but said she would help as well unless we divorce. In that case, I may move if my income doesn't rise, then all expenses would drop.''

Now 64, Stenstrom gets $1,574 a month in Social Security and reported making $1,300 a month as a consultant. Asked what kind of consulting, he replied "marketing, media, construction'' but would not elaborate.

The Stenstroms are getting divorced, he said, although she is still living in the townhouse. Records show Stenstrom was arrested in June on a misdemeanor domestic battery charge but was allowed to enter a pre-trial diversion program.

If Stenstrom doesn't willingly move, the owner of the townhouse — who lives in Shanghai, China — and the property management company might have to wait awhile to get him out.

"If they didn't obtain a judgment (before he filed), they can't proceed,'' McEwen said.

McEwen and other Tampa bankruptcy judges have been cracking down on people like Stenstrom who repeatedly file bankruptcy petitions to block foreclosure and eviction.

In the past two years scores of debtors have been deemed "serial abusive filers'' and banned from refiling, typically for up to two years. Yet that hasn't stopped others from trying.

"Oh, heck yeah, we've been having dockets (of serial filers) twice a month,'' McEwen said. "We did a stack of them last week.''

Contact Susan Taylor Martin at or (727) 893-8642. Follow @susanskate


Petition claims

Paul Stenstrom recently filed a 15th bankruptcy petition after filing 14 other petitions (his wife filed four more) between 2002 and 2013 to keep their Palm Harbor home from being sold at a foreclosure auction. Here is what he listed on some of the petitions:

Petition No. 4, May 2006: Works in media sales; owes $36,609 in child support in Texas, $6,000 to IRS.

Petition No. 5, December 2006: Self-employed in architectural trim manufacturing; $38,000 in child support.

Petition No. 7, August 2009: Self-employed business consultant; owes $42,000 in child support.

Petitions No. 9, 10, 11, 12: All filed in 2010. Three dismissed for failure to file required information; one dismissed for abusing bankruptcy system. Stenstrom banned in 2011 from refiling for two years.

Petitions No. 13 and 14: Both filed in 2013 after filing ban lifted, both cases dismissed. Stenstrom banned from filing for another two years "for abusing the bankruptcy process.''

Petition No. 15: Having finally lost his house, Stenstrom filed a new petition Nov. 10 as he faced possible eviction from a rented townhome for owing $7,800.

Bankruptcy fallout

Though declaring bankruptcy can relieve a person of certain debts and can temporarily block the forced sale of a house in foreclosure, bankruptcy has many negative effects:

• A bankruptcy filing stays on your credit report for up to 10 years and can drive up interest rates on credit cards.

• It can be very hard to get a mortgage for two or more years after a bankruptcy filing. Most people can get only high-interest, low-dollar loans following bankruptcy.

• It can be hard to get a job. Many employers now do credit checks in addition to criminal background checks.

For Paul Stenstrom, bankruptcy pays off — again and again and again 11/20/15 [Last modified: Friday, November 20, 2015 9:30pm]
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