500 B.R. 594
Bankr. D. Minn.2013Background
- Debtors filed a voluntary Chapter 7 petition in 2008, represented by Attorney Agosto.
- Meeting of creditors occurred August 12, 2008; financial management certificates were due September 26, 2008.
- Deadline extended to October 14, 2008; debtors did not request an extension and filed no certificates by that date.
- Case closed without discharge on October 16, 2008; debtors completed the financial management course on October 19, 2008 and filed certificates on October 20, 2008.
- In 2013, new counsel filed a motion to reopen; debtors testified about delays in completing the course and internet access issues, and stated creditors were attempting collection.
- The court denied the motion to reopen, finding no compelling reason or timely, reasonable explanation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is cause to reopen for late financial management compliance | Johnson argues for reopening based on late course completion due to circumstances. | Court requires a compelling reason and timely filing; delay is excessive with no valid explanation. | No cause to reopen. |
| Whether failure to timely complete and file certificates bars reopening | Johnson contends late completion should be excused to permit discharge. | Late filing after dismissal cannot be excused; deadline ignored; prejudice to creditors not demonstrated. | Late completion/failure to file certificates does not justify reopening. |
| Timeliness of the motion to reopen | Delay was caused by life events and creditors' collection actions. | Over four years elapsed with no timely action; delay undermines justification. | Motion to reopen not timely. |
| Counsel monitoring and debtor's reliance on attorney | Debtors relied on attorney's statements not to worry about collection. | No evidence tying counsel's monitoring failure to a valid reason to reopen. | No basis shown for reopening based on counsel failure. |
Key Cases Cited
- In re Borer, 73 B.R. 29 (Bankr.N.D.Ohio 1987) (compelling reason required to reopen)
- In re Otto, 311 B.R. 43 (Bankr.E.D.Pa.2004) (burden on movant to show cause for reopening)
- In re Bauer, 291 B.R. 127 (Bankr.D.Minn.2003) (administration of estate after close; short delay case-specific)
- In re Marshall, 211 B.R. 662 (Bankr.D.Minn.1997) (trustee involvement in administration after closure)
- In re Meyer, 105 B.R. 920 (Bankr.D.Minn.1989) (late reopening based on newly available assets)
- Apex Oil Co., Inc. v. 406 F.3d 538, 406 F.3d 538 (8th Cir. 2005) (case law on standards for reopening after closure)