620 B.R. 888
Bankr. E.D. Mich.2020Background
- Debtor Louise Smith filed a pro se Chapter 7 petition on December 12, 2017 (with counsel), and a §341 meeting was set for January 17, 2018.
- Under Rule 1007(b)(7)/1007(c) the debtor had 60 days after the §341 date (deadline March 19, 2018) to file Official Form 423 (Certificate of completion of a post‑petition financial management course) to obtain a discharge.
- Smith did not file the Certificate by the deadline and did not seek an extension; the case was closed on May 8, 2018 without a discharge. Notice of the final decree (stating the reason) was emailed/mailed to counsel and the debtor.
- On November 4, 2020—about 2.5 years after closure—Smith moved to reopen the case to file the Certificate (stating she had “forgotten” and completed the course as of 10/27/2020) and sought waiver of the reopening fee.
- The court found no credible excuse for the long delay, observed the debtor was represented by counsel who also received notice, applied a four‑factor test used in similar reopenings, denied the motion to reopen and to grant a retroactive extension, but waived the filing fee; debtor was not barred from filing a new bankruptcy case.
Issues
| Issue | Smith’s Argument | Court/Opposition Argument | Held |
|---|---|---|---|
| Whether there is “cause” to reopen to file the Certificate / grant a retroactive extension | Smith: she forgot but has now completed the course and seeks reopening to obtain discharge | Court: long unexplained 2.5‑year delay, notice given, no timely motion for extension; equities weigh against reopening | Denied reopening and retroactive extension |
| Whether Smith’s failure to comply has a reasonable explanation | Smith: asserted she "forgot" and later completed the course | Court: forgetting is not credible after explicit final‑decree notice; represented by counsel who received notice | Found no reasonable explanation; weighs against relief |
| Whether the request was timely | Smith: completed course in Oct 2020 and filed motion Nov 2020 | Court: 2.5‑year delay frustrates Congressional purpose of timely post‑petition education and is not timely | Request untimely; weighs heavily against reopening |
| Whether counsel’s fault or creditor prejudice justifies reopening | Smith: did not allege attorney fault | Court: fault lies with debtor; delay prejudices creditors and the integrity of the system | No fault shown for counsel; creditors prejudiced; weighs against relief |
Key Cases Cited
- Rosinski v. Rosinski, 759 F.2d 539 (6th Cir. 1985) (decision to reopen a bankruptcy case is committed to the bankruptcy court's discretion)
- In re Barrett, 569 B.R. 687 (Bankr. E.D. Mich. 2017) (applied four‑factor test and denied motion to reopen to file Certificate after long delay)
- In re Suell, 619 B.R. 642 (Bankr. E.D. Mich. 2020) (denial of motion to reopen after nearly two years’ delay)
- In re Johnson, 500 B.R. 594 (Bankr. D. Minn. 2013) (denial of reopening where post‑petition requirements and paperwork were untimely)