In Re Fawson
AMENDED
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MEMORANDUM DECISION DENYING MOTIONS TO EXTEND TIME TO FILE PAPERS REQUIRED BY
These two Chapter 7 cases raise the issue of the extent of the Court’s discretion regarding the automatic dismissal of a case pursuant to
I. BACKGROUND
Jason G. Fawson (Fawson) filed a Chapter 7 petition on December 6, 2005. On the same day, Francis William Webster (Webster) and Diana Lorrie Webster (together the Websters) also filed a Chapter 7 petition. Immediately thereafter, Faw-son and the Websters (collectively, the Debtors) filed various papers, but the Debtors did not file copies of payment advices or other evidence of payment received within 60 days before the date of the filing of the petition as required by
Different trustees were appointed in each case. A § 341 meeting was noticed
The
At this point, the two cases diverged somewhat. In Fawson, payment advices were filed on January 27, 2006, the day after issuance of the Order to Show Cause and, apparently, at the conclusion of the continued § 341 meeting. These papers, however, did not cover the 60 days prior to the date of filing, and on January 30, 2006, amended payment advices were filed that covered the required period. A “Debtor’s Response to Order to Show Cause Dated January 26, 2006, and Ex Parte Motion to Extend Time to File Pre-Petition Payment Advices” (Fawson’s Motion) was filed a week later. In Webster, three affidavits or statements were filed—one by Diana Lorrie Webster indicating that she was not employed during the 60 days prior to the fling and did not receive any payment advices from an employer; one by Webster indicating that he was employed and had delivered his payment advices to his attorney; and one by the Websters’ attorney giving an explanation of the reasons why Webster’s pаyment advices were not filed and requesting affirmative relief that the Websters’ Chapter 7 case not be dismissed. Webster also filed his payment advices reflecting his income from his employer during the applicable period. Neither Chapter 7 trustee has responded to the Court’s Order to Show Cause. Deeming the issues joined, the Court has decided to treat the Websters’ attorney’s affidavit that seeks affirmative relief as a motion and to consolidate the ruling on both Faw-son’s and the Websters’ motions in one memorandum decision.
II. DISCUSSION
Having jurisdiction over these core matters as more fully discussed below,
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the Court will take, in order, each of the Debtors’ arguments as to why these cases were not dismissed by operation of the statute
A. FAWSON
Fawson’s Motion represents, and the Court accepts as fact, that his attorney was experiencing computer difficulties in the week prior to the January 3, 2006 § 341 meeting. This affected the attorney’s ability to retrieve and transmit copies of Fawson’s 2004 tax returns, as well as the electronically maintained notes in the attorney’s data bаse. This computer problem affected Fawson’s case as well as this attorney’s other cases. There is no specific indication in Fawson’s Motion as to when his payment advices were available for filing or how the computer problems prior to the § 341 meeting precluded their filing within the 45-day period. Upon receipt of the United States trustee’s notice pursuant to § 704(b)(1)(A), Fawson’s attorney contacted personnel at the United States trustee’s office on January 20, 2006, and as a result of the ensuing conversation, Fawson’s attorney “accepted the insinuation [from United States trustee staff] that the Debtor had complied with the requirement to provide the necessary documentation.” 7 Thereafter, on January 27 and 30, payment advices were filed as set forth above. Fawson’s Motion also moves the Court to issue an order extending the deadline to file the payment advices to January 30, 2006.
B. WEBSTER
The affidavit filed by Webster’s attorney represents, and the Court accepts as fact, that he delivered Webster’s payment advices to the United Statеs trustee and to the Chapter 7 trustee. He explains, however, that the papers were not filed in a timely manner with the Court because of his inexperience with the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), and that his unfamiliarity with each of the Court’s filing requirements led him to deliver the documents required to the United States trustee and to the Chapter 7 trustee but to omit filing the documents with the Court. Webster’s attorney’s affidavit then requests the Court to excuse as “harmless error” the untimely filing and requests that the Chapter 7 case not be dismissed.
C.ARGUMENTS RAISED
The Debtors argue that the cases were not dismissed on the 46th day by operation of the statute and that the Court retains discretion in this matter for four reasons: a) the content of
1.
The Interplay Between
Fawson argues that
Fawson argues that
Once the determination that all of the provisions of
This interpretation is neither inconsistent with
2.
Webster’s case, however, could have raised a slightly different issue. Copies of the payment advices were given to the Chapter 7 trustee. But they cannot be deemed to have been filed with the Court by an error in filing as provided in Rule 5005(c) because to deem a filing with a trustee a filing with the Court, the filing party must have intended to file the papers with the Court.
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Clearly that is not the fact in Webster’s casе. Because the Chapter 7 trustee did not file a timely motion under
3.
Fawson also argues that the Court’s discretion to order that the case not be dismissed and to extend the time to file the payment advices until January 30, 2006 is reflected in
4.
Requests for Enlargement of Time under
It is unclear whether the Debtors’ requests for enlargement of time are based on an enlargement of the 15-day period provided in Rule 1007(c) or whether the Debtors are requesting to extend the 45-day period to stop dismissal of the case under
a. Enlargement of the 15-day Period in Rule 1007
Webster has argued that the failure to timely meet the requirements of
b. Enlargement of the Statutory Time Found in
If Webster and Fawson intended to request an enlargement of time to file
Second,
III. CONCLUSION
The new requirements of BAPCPA are numerous, and filing a case under the new Code can be perilous. There are many new pitfalls to be negotiated throughout the pendency of a bankruptcy case. Here, Fawson and Webster failed to timely file their payment advices, and no one timely filed a request for an extension of time. The belated requests for enlargement of time due to excusable neglect are time barred.
Notes
. The first and third sentences of subsection 1 on page six have been amended to cite to
. Future statutory references are to title 11 of the United States Code unless otherwise noted.
. For the reasons articulated below, Diana Lorrie Webster’s case is not dismissed, and the case will remain under the jurisdiction of the Court.
.Some attorneys file a pleading indicating that a debtor did not receive any payment advices from any employer in the 60 days prior to filing, which is a prudent practice. An example of this form entitled Statement Under Penalty of Perjury Concerning Payment Advices Due Pursuant to
.
.
. Fawson’s Mot. at ¶ 6.
.
. http://dictionary.reference.
com/search? q=automatic (February 10, 2006). Black's Law Dictionary 169 (Rev. 4th Ed.) provides a similar definition: "Having inherent power of action or motion; self-acting or self-regulating; mechanical.”
. The only discretion built into
. The difficulty with
. For example, § 362(c)(4)(A)(ii) which requires the Court to "promptly” enter an order confirming that no stay is in effect.
.
In re Commercial Fin. Servs., Inc.,
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Subject to paragraph (4) and upon request of the debtor made within 45 days after the date of filing of the petition described in paragraph (1), the court may allow the debtor an additional period of not to exceed 45 days to file the information required under subsection (a)(1) if the court finds justification for extending the period for filing.
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Notwithstanding any other provision of this subsection, on the motion of the trustee filed before the expiration of the applicable period of time specified in paragraph (1), (2), or (3), and after notice and a hearing, the court may decline to dismiss the case if the court finds that the debtor attempted in good faith to file all the information required by subsection (a)(l)(B)(iv) and that the best interests of creditors would be served by administration of the case.
. If the Chapter 7 trustees did not believe grounds existed to file motions under § 523(f)(4), then it would seеm appropriate for them to file a request for entry of a dismissal order under § 523(i)(2) rather than continue to administer assets in a dismissed case.
.
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(a) The debtor shall—
(1) file—
(A) a list of creditors; and
(B) unless the court orders otherwise—
(i) a schedule of assets and liabilities;
(ii) a schedule of current income and current expenditures;
(iii) a statement of the debtor's financial affairs and, if section 342(b) applies, a certificate—
(I) of an attorney whose name is indicated on the petition as the attorney for the debtor, or a bankruptcy petition preparer signing the petition under section 110(b)(1), indicating that such attorney or the bankruptcy petition preparer delivered to the debtor the notice required by section 342(b); or
(II) if no attorney is so indicated, and no bankruptcy pеtition preparer signed the petition, of the debtor that such notice was received and read by the debtor;
(iv) copies of all payment advices or other evidence of payment received within 60 days before the date of the filing of the petition, by the debtor from any employer of the debtor;
(v) a statement of the amount of monthly net income, itemized to show how the amount is calculated; and
(vi) a statement disclosing any reasonably anticipated increase in income or expenditures over thе 12-month period following the date of the filing of the petition.
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Except as provided in paragraphs (2) and (3) of this subdivision, when an act is required or allowed to be done at or within a specified period by these rules or by a notice given thereunder or by order of court, the court for cause shown may at any time in its discretion (1) with or without motion or notice order the period enlarged if the request therefor is made before the expiration of the period originally prescribed or as extended by a previous order or (2) on motion made after the expiration of the specified period permit the act to be done where the failure to act was the result of excusable neglect.
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any extension of time for the filing of the schedules, statements and other documents may be granted only on motion for cause shown and on notice to the United States trustee and to any committee elected under § 705 or appointed under § 1102 of the Code, trustee, examiner, or other party as the court may direct.
. See footnote 19.
. Had the parties filed a
.
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In re Damach, Inc.,
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