OPINION AND ORDER (1) DENYING DEBTOR'S EX PARTE MOTION TO REOPEN CASE, BUT WAIVING MOTION FILING FEE; AND (2) STRIKING THE "CERTIFICATE OF DEBTOR EDUCATION" FILED JUNE 27, 2017
THOMAS J. TUCKER, Bankruptcy Judge.
This case is before the Court on the Debtor's motion filed June 27, 2017, entitled "Ex Parte Motion To Reopen Case and Request Waive Reopen Fee." (Docket # 16, the "Motion"). The Motion seeks to reopen this case, to enable the Debtor to file a Financial Management Course Certificate ("Certificate") and receive a discharge. The Motion was filed more than 8 years 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.
The Debtor filed a voluntary petition for relief under Chapter 7 on March 14, 2008, commencing this case. That same day, the Clerk issued a notice that the first meeting of creditors would be held on April 24, 2008 at 1:00 p.m. (Docket # 9, the "Notice"). The Notice was served on all creditors, the Chapter 7 Trustee, Debtor's attorney, and the Debtor. (Docket # 11). On March 17, 2008, the Court entered an Order granting the Debtor a waiver of the Chapter 7 filing fee. (Docket # 10).
Under Fed. R. Bankr. P. 1007(b)(7)(A),
More than 8 years later, on June 27, 2017, the Debtor filed the Motion, and a Certificate. (Docket ## 16, 17). The Certificate states, in relevant part, that "on June 26, 2017 . . . [Debtor] Mark A. Barrett completed a course on personal financial management given by internet by GreenPath, Inc." (Docket # 17).
The Motion does not allege any valid excuse why the Debtor failed to timely complete a financial management course and file the required Certificate, more than 8 years ago. Nor does the Motion allege any reason, let alone a valid excuse, why the Debtor waited for more than 8 years after this case was closed before he moved to reopen it.
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), 759 F.2d 539, 540-41 (6th Cir. 1985) (citations omitted). "To make the decision, courts may consider `the equities of each case with an eye toward the principles which underlie the Bankruptcy Code." In re Chrisman, No. 09-30662, 2016 WL 4447251, at *1 (Bankr. N.D. Ohio August 22, 2016) (citation omitted). Debtor has the burden of establishing that "cause" exists to reopen this case. See id. (citing Rosinski, 759 F.2d 539 (6th Cir. 1985)).
Bankruptcy Rule 9006(b)(3) states, in relevant part, that "the court 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) [of 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
Several reported bankruptcy cases have considered whether "cause" exists to grant a debtor's motion to reopen a case 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 course 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 the request was timely; (3) whether fault lies with counsel; and (4) whether creditors are prejudiced." See, e.g., In re Chrisman, No. 09-30662, 2016 WL 4447251, at *2-3 (Bankr. N.D. Ohio Aug. 22, 2016) (Chapter 7) (denying a Debtor's motion to reopen to file a Certificate where the debtor had not completed the post-petition financial management course and did not file the motion to reopen and Certificate until more than 7 years after the case was closed, and stating that "the seven year delay in this case [was] extreme"); In re McGuiness, No. 08-10746, 2015 WL 6395655, at *2, 4 (Bankr. D.R.I. Oct. 22, 2015) (Chapter 7) (more than 7-year delay); In re Johnson, 500 B.R. 594, 597 (Bankr. D. Minn. 2013) (Chapter 7) (more than 4-year delay); cf. In re Heinbuch, No. 06-60670, 2016 WL 1417913, *3-4 (Bankr. N.D. Ohio April 7, 2016) (Chapter 13) (approximately 7-year delay).
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 8+ year 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 timely comply with the financial course requirement. Nor has the Debtor provided a valid or reasonable explanation for the 8+ year delay in his seeking to reopen this case. This factor, therefore, weighs in favor of denying the Motion.
The Motion says only that "[d]uring the final process of my bankruptcy I moved and lost communication with my lawyer. I was not informed when to take my financial class." From this it appears that the Debtor's failure to timely file the Certificate was because he lost touch with his lawyer. But such losing touch with his lawyer was due to the Debtor's own fault and neglect. Moreover, even if the Debtor was not informed by his lawyer of the June 23, 2008 deadline for taking the financial management course and filing the Certificate, the Debtor was informed, by the notice described above, which was mailed to him on December 17, 2008, 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 more than 8 years in both the Debtor's completion of the financial management course and in filing the Certificate in this case is extreme. Such a long delay frustrates the goals of the legislation which added the financial management course requirement as a condition for obtaining a Chapter 7 discharge. In Chrisman, the Court explained:
Chrisman, 2016 WL 4447251, at *1, *2 (quoting Heinbuch, 2016 WL 1417913, at *2). In Chrisman, "neither the instructional component nor the paperwork component were timely accomplished," and the court found that "[t]he Congressional purposes in adding the post-petition financial management instructional requirement to the Bankruptcy Code as a condition of discharge [had] been completely stymied." Id. at *3. The magnitude of the delay in this case is greater than even the 7-year delay in Chrisman, and the delay in the other cases cited above, in which the debtors' motions to reopen were denied. This factor strongly weighs in favor of denying the Motion.
Factor 3: whether fault lies with counsel
Debtor was represented by counsel in this case until the case was closed in 2008, 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. Rather, as discussed above, it appears that the Debtor lost touch with his lawyer through his own fault and neglect. This factor weighs in favor of denying the Motion.
In Chrisman, the Court reasoned, with regard to the prejudice factor, that "[t]o spring a discharge on creditors 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 is even longer than the delay in Chrisman. Generally speaking, the longer the delay, the greater the prejudice. Here, there was an extremely 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. Debtor has failed to demonstrate cause to reopen this case. Accordingly,
IT IS ORDERED that:
1. The Motion (Docket # 16) is denied, except for the waiver of the filing fee.
2. The filing fee for the Motion is waived.
3. The certificate entitled "Certificate of Debtor Education" filed June 27, 2017 (Docket # 17) is stricken, because it is untimely in the extreme, and because this case is closed (and will not be reopened).