574 B.R. 824
Bankr. E.D. Mich.2017Background
- Debtor filed a Chapter 7 petition on January 21, 2014; § 341 meeting set for February 26, 2014. Clerk waived the Chapter 7 filing fee.
- Debtor was required to file an Official Form (Certificate of Completion of Financial Management Course) within 60 days after the § 341 date (deadline: April 28, 2014).
- Debtor did not file the Certificate by the deadline; case was closed April 29, 2014 without a discharge and notice of that closure was mailed to the Debtor and creditors.
- More than three years later (September 28, 2017) Debtor filed an ex parte motion to reopen to submit a Certificate (dated September 26, 2017) and requested waiver of the reopening fee.
- The Motion offered only that Debtor had cancer in 2013–2015; it did not explain why Debtor completed the course and sought reopening only after a 3+ year delay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the case should be reopened under 11 U.S.C. § 350(b) to allow filing of the post-petition financial management Certificate | Debtor asked to reopen so she can file the Certificate and receive a discharge; cited illness (cancer) as explanation | Court: Debtor provided no adequate excuse for failing to timely complete the course or for waiting >3 years; reopening is discretionary and requires cause shown | Denied — no cause to reopen; motion fee waiver granted |
| Whether the Court should extend the time to file the Certificate under Fed. R. Bankr. P. 1007(c) and 9006(b)(3) | Debtor implicitly seeks enlargement to excuse the missed deadline and preserve discharge | Court: extensions require cause and notice; extreme delay frustrates statutory goals and no notice/justification provided | Denied — no extension for 3+ year delay |
| Whether fault for noncompliance lies with counsel (impacting equities) | Debtor did not argue counsel fault | Record shows Debtor was unrepresented; failure attributed to Debtor’s own neglect | Court found fault lies with Debtor; weighs against reopening |
| Whether creditors would be prejudiced by reopening and granting a late discharge | Debtor did not dispute prejudice | Court: long delay harms creditors and undermines statutory purpose of timely financial education | Court found prejudice exists; weighs against reopening |
Key Cases Cited
- Rosinski v. Rosinski, 759 F.2d 539 (6th Cir.) (reopening decisions committed to bankruptcy court discretion)
- In re Barrett, 569 B.R. 687 (E.D. Mich.) (denying reopening to file financial-management certificate after long delay)
- In re Johnson, 500 B.R. 594 (Bankr. D. Minn.) (denying reopening after multi-year delay in filing required post-petition certificate)