638 B.R. 582
Bankr. E.D. Mich.2022Background:
- Debtor Ryan A. Keller filed Chapter 7 on Jan. 24, 2020; §341 meeting set for Feb. 26, 2020.
- Rule 1007(b)(7) required filing an Official Form 423 (Financial Management Course Certificate) within 60 days — deadline April 27, 2020.
- Debtor did not file the certificate or seek an extension; case was closed without a discharge on May 26, 2020 with notice mailed to debtor and counsel.
- More than 21 months later (Apr. 7, 2022) debtor moved to reopen under 11 U.S.C. §350(b) to file the certificate and obtain a discharge, alleging he completed the course on Apr. 7, 2022.
- Court applied the established four-factor test (reasonable explanation, timeliness, counsel fault, creditor prejudice) and found no cause to reopen or to grant a retroactive extension.
- Motion to reopen was denied; debtor is not prevented from filing a new bankruptcy case.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is "cause" to reopen under §350(b) so debtor can file Form 423 and obtain a discharge | Keller completed course on Apr. 7, 2022 and seeks reopening to file certificate; denial causes undue hardship | No reasonable excuse for missing Apr. 27, 2020 deadline; 21+ month delay; notice was given; no motion for extension; creditors prejudiced | Denied — debtor failed to show cause to reopen |
| Whether to grant a retroactive enlargement of time to file the certificate under Rules 1007(c)/9006(b)(3) | Requests retroactive relief to cure missed filing and obtain discharge | Extensions require cause, timely motion, notice; delay and lack of excuse preclude relief; courts use four-factor balancing | Denied — no retroactive extension granted |
Key Cases Cited
- Rosinski v. Rosinski, 759 F.2d 539 (6th Cir. 1985) (bankruptcy court has discretion whether to reopen a closed case)
- In re Barrett, 569 B.R. 687 (Bankr. E.D. Mich. 2017) (applies four-factor test to deny reopening to file post-petition financial management certificate)
- In re Page, 637 B.R. 1 (Bankr. E.D. Mich. 2022) (denial of motion to reopen where delay undermines statutory purpose)