In re Bragg
This case is before the Court on the Debtor’s motion filed November 28, 2017, entitled “Ex-Parte Motion To Reopen Chapter 7 Case To Allow Entry of the Certificate of Completion of the Financial Management Course” (Docket #21, the “Motion"). The Motion seeks to reopen this сase, to enable the Debtor to file a Financial Management Course Certificate (“Certificate”) and receive a discharge. The Motion was filed almost 11 months after this case was closed without a discharge; due to the Debtor’s failure to timely file such Certificate. The Motion also seeks a waiver of the filing fee for the Motion. For the following reasons, the Court will deny the Motion, except for the waiver of the filing fee.
A. Background
The Debtor filed a voluntary petition for relief under Chapter 7 on October 22, 2016, commencing this case. That same day, the Clerk issued a notice that the first meeting of creditors would be held on November 30, 2016 at 11:00 a.m, (Docket # 7, the “Notice”). On October 26, 2016, the Notice was served by the Bankruptcy Noticing Center by mail on all creditors, the Chapter 7 Trustee, and the Debtor. (Docket #8),
Under Fed. R. Bankr. P. 1007(b)(7)(A),
On January 31, 2017, after the case had been fully administered, the case was closed without a discharge, due to Debtor’s failure to file the Certificate. (Docket # 19). Notice of the Final Dеcree entered that day (Docket # 19) was served on Debtor’s counsel by e-mail, through the Court’s ECF system. And a notice that the Debtor’s bankruptcy case had been closed without a discharge was served by the Bankruptcy Noticing Center by mail on February 2, 2017 ón all creditors, and the Debtor. (Docket # 20). Such notice stated: “All creditors and parties in interest are notified that the above-captioned case has been closed without entry of discharge as Debtor(s) did not file Official Form 423, Certification About a Financial Management Course.” (Id.)
Almost 11 months latеr, on November 28, 2017, the Debtor filed the Motion (Docket # 21). The Motion states, in relevant part: “Debtor completed the required Certificate of Completion of the Financial Management Course on November 27, 2017.” (Mot. at ¶ 3.)
The Motion does not allege or demonstrate any reason, let alone a valid excuse, (1) why the Debtor failed to timely complete the financial, management course and file the required Certificate, 11 months ago; or (2) why the Debtor waited for nearly 11 months after this case was closed before he moved tо reopen it.
B. Discussion
Section 350(b) of the Bankruptcy Code, Bankruptcy Rule 5010,
“It is well settled that decisions as to whether to reopen bankruptcy cases ... are committed to the sound discretion of the bankruptcy judge .... ” Rosinski v. Rosinski (In re Rosinski),
Bankruptcy Rule 9006(b)(3) states, in relevant part, that “the cоurt may enlarge the time to file the statement required under Rule 1007(b)(7) [(the Certificate)] ... only to the extent and under the conditions state in Rule 1007(c). Fed. R. Bankr. P. 9006(b)(3). Bankruptcy Rule 1007(c), in turn, permits a bankruptcy court “at any time and in its discretion, [to] enlarge the time to file the statement required by subdivision (b)(7) [оf Bankruptcy Rule 1007(c) [ (namely, a Certificate) ].” Fed. R. Bankr. P. 1007(c). However, with an exception not applicable here, any such extension “may be granted only on motion for cause shown and on notice to the United States trustee, any committee elected under § 705 or appointed under § 1102 of the Code, trustee, examiner, or other party as the court may direct.” Fed. R. Bankr. P. 1007(c) (emphasis added).
Several reported bankruptcy cases have considered whether “cause” exists to grant a debtor’s motion to reopen a сase to file a Certificate after the debtor’s case was closed without a discharge. Such cases apply a four-part test, and have denied the motion where the Debtor had not completed a post-petition financial management coursе and filed the motion to reopen and a Certificate within a short time after the case was closed. The four factors that these cases have considered are: “(1) whether there is a reasonable explanation for the failure to comply; (2) whether thе request was timely; (3) whether fault lies with counsel; and (4) whether creditors are prejudiced.” See, e.g., In re Barrett,
Recently, this Court has denied motions to reopen in several cases, where the delay ranged from 11 months to more than 8 years. See In re Barrett,
The Court will apply this four-factor approach in this case. The Court finds that the Debtor has not shown either cause to reopen this case, or cause to grant the Debtor an 11-month extension of the deadline to file the Certificate.
Factor 1: whether there is a reasonable explanation for the failure to comply
The Debtor has not provided a valid or reasonable explanation for his failure to
The Motion does not provide any reason whatsoever why the Debtor was unable to timely complete a financial management course. The Motiоn also does not explain why the Debtor waited approximately 11 months after the case was closed to move to reopen the case and take the financial management course. The Debtor was informed, by the notice described above, which was mailed to him on February 2, 2017, that his case had been closed without a discharge, and why it had been so closed.
Factor 2: whether the request was timely
The delay of approximately 11 mоnths in both the Debtor’s completion of the financial management course and in filing the Certificate in this case is too long. Such a long delay frustrates the goals of the legislation which added the financial management course requirement as a condition for obtaining а Chapter 7 discharge. In Chris-man, the Court explained:
Congress added participation in a post-petition financial management instructional course as a condition to obtaining a Chapter 7 discharge to the Bankruptcy Code in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. 11 U.S.C. § 727(a)(11). One of the goals of the legislation and this requirement was to restore individual financial responsibility to the bankruptcy system.
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“The main purpose of a bankruptcy filing is to obtain a discharge, and any action that delays that benefit is mystifying and therefore requires additional justification. Justification supports the goals of not only the bankruptcy system, but also the purpose of the financial management course. Allowing a debtor to take the financial management course years after its target completion рrovides no educational benefit to the debt- or for the intervening years and denigrates its purpose. Moreover, it maligns the integrity of the system and its fairness to all parties... .It is unfair to creditors to allow a debtor to avoid the responsibilities established by the bankruptcy code and rules, only to later want to fulfill those requirements when faced with a resulting unpleasantness.”
Chrisman,
Factor 3: whether fault lies with counsel
The Debtor was represented by counsel in this case at all times until the case was closed, but Debtor did not allege in the Motion that his failure to timely complete the Financial Management Course and to file a Certificate was the fault of his counsel. The fault for failing to timely cоmplete the Financial Management Course and to file a Certificate was entirely due to the
Factor 4: whether creditors are prejudiced
In Chrisman, the Court reasoned, with regard to the prejudice factor, that “[t]o spring a discharge on crеditors more than seven years later that many of them will now not even receive, at peril of violating the unknown discharge, is simply unfair.” Id. at *3. The delay in this case, although shorter than the delay in Chñs-man, is still long. Generally speaking, the longer the delay, the greater the prejudice. Here, there was a long delay. This factor therefore, also weighs against granting the Motion.
In summary, all of the relevant factors weigh against a finding of cause to reopen this case. The Debtor has failed to demonstrate cause to reopen this case. Acсordingly,
IT IS ORDERED that:
1. The Motion (Docket #21) is denied, except for the waiver of the filing fee.
2. The filing fee for the Motion is waived.
3. The Debtor is not prohibited from filing a new bankruptcy case.
Notes
. Fed. R. Bankr. P. 1007(b)(7)(A) states the requirement for a debtor to file a Certificate, It provides:"
(7) Unless an approved provider of an instructionаl course concerning personal financial management has notified the court that a debtor has completed the course after filing the petitipn:
(A) An individual debtor in a chapter 7 .., case shall file a statement of completion of the course, prеpared as prescribed by the appropriate Official Form[.]
. Fed. R. Bankr. P. 1007(c) provides the time limit, for filing the Certificate. It states, in relevant part:
In a chapter 7 case, the debtor shall file the statement required by subdivision (b)(7) within 60 days after the first date set for the meeting of crеditors under § 341 of the Code[,]
. Fed. R. Bankr. P. 4004(c)(1)(H) states:
(c) Grant of discharge
(I) In a chapter 7 case, on expiration of the times fixed for objecting to discharge and for filing a motion to dismiss the case under Rule 1017(e), the court shall forthwith grant the discharge, except that the court shall not grant the discharge if:
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(H) the debtor has nоt filed with the court a statement of completion of a course concerning personal financial management if required by Rule 1007(b)(7)[.]
.Under Section 727(a)(l 1), the court may not grant a discharge to a debtor who has not filed a Certificate. It provides, in relevant part, thаt with exceptions not applicable here:
(a) The court shall grant the debtor a discharge, unless-
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(II) after filing the petition, the debtor failed to complete an instructional course concerning personal financial management described in section 111 [,]
. Sixty days after the first date set for the meeting of creditоrs was Sunday, January 29, 2017. So the Debtor was required to file a Certificate no later than Monday, January 30, 2017. See Fed. R. Bankr. P. 9006(a)(1)(C).
. Bankruptcy Rule 5010 states, in relevant part, that "[a] case may be reopened on motion of the debtor .., pursuant to § 350(b) of the Code." Fed. R. Bankr. P. 5010.
.Local Bаnkruptcy Rule 5010-l(b) states, in relevant part that "[a]fter a case is closed, a debtor seeking to file ,. a Certification About Financial Management Course ... must file a motion to reopen the case.” LBR 5010-1(b) (E.D. Mich.).
. The Motion does not allege that the Debtor did not receive this notice. And there is no indication in the record that the mailing was returned undelivered by the post office.