The Bankruptcy Act and one of this Court's complementary Orders in Bankruptcy impose fees and make the payment of those fees a condition to a discharge in voluntary bankruptcy.
Appellee Kras, an indigent petitioner in bankruptcy, challenged the fees on Fifth Amendment grounds. Upon receiving notice of the constitutional issue in the District Court, the Government moved to intervene as of right under 28 U. S. C. § 2403 and Rule 24 (a) of the Federal Rules of Civil Procedure. Leave to intervene was granted. The District Court held the fee provisions to be unconstitutional as applied to Kras. 331 F.Supp. 1207 (EDNY 1971). It reached this conclusion in the face of an earlier contrary holding by a unanimous First Circuit. In re Garland, 428 F.2d 1185 (1970), cert. denied, 402 U.S. 966 (1971). Pursuant to 28 U. S. C. § 1252, the Government appealed. We noted probable jurisdiction. 405 U.S. 915 (1972).
I
Section 14 (b) (2) of the Bankruptcy Act, 11 U. S. C. § 32 (b) (2), provides that, upon the expiration of the time fixed by the court for filing of objections, "the court shall discharge the bankrupt if no objection has been filed and if the filing fees required to be paid by this title have been paid in full." Section 14 (c), 11 U. S. C. § 32 (c), similarly provides that the court "shall grant the discharge unless satisfied that the bankrupt. . . (8) has failed to pay the filing fees required to be paid by this title in full." Section 59 (g), 11 U. S. C. § 95 (g), relates to the dismissal of a petition in bankruptcy and states that "in the case of a dismissal for failure to pay the costs," notice to creditors shall not be required. Three separate sections of the
Three charges are imposed: $37 for the referee's salary and expense fund, $10 for compensation of the trustee,
The Court's General Order in Bankruptcy No. 35 (4), as amended June 23, 1947, 331 U.S. 873, 876-877, 11 U. S. C. App., p. 2210, complements § 40 (c) (1) and provides that, upon a proper showing by the bankrupt, the fees may be paid in installments within a six-month period, which may be extended not to exceed three months.
II
Robert William Kras presented his voluntary petition in bankruptcy to the United States District Court for the Eastern District of New York on May 28, 1971. The petition was accompanied by Kras' motion for leave to file and proceed in bankruptcy without payment of any of the filing fees as a condition precedent to discharge. The motion was supported by Kras' affidavit containing the following allegations that have not been controverted by the Government:
1. Kras resides in a 2 1/2-room apartment with his wife, two children, ages 5 years and 8 months, his mother, and his mother's 6-year-old daughter. His younger child suffers from cystic fibrosis and is undergoing treatment in a medical center.
2. Kras has been unemployed since May 1969 except for odd jobs producing about $300 in 1969 and a like amount in 1970. His last steady job was as an insurance agent with Metropolitan Life Insurance Company. He was discharged by Metropolitan in 1969 when premiums he had collected were stolen from his home and he was unable to make up the amount to his employer. Metropolitan's claim against him has increased to over $1,000 and is one of the debts listed in his bankruptcy petition. He has diligently sought steady employment in New York City, but, because of unfavorable references from Metropolitan, he has been unsuccessful. Mrs. Kras was employed until March 1970, when she was
3. The Kras household subsists entirely on $210 per month public assistance received for Kras' own family and $156 per month public assistance received for his mother and her daughter. These benefits are all expended for rent and day-to-day necessities. The rent is $102 per month. Kras owns no automobile and no asset that is non-exempt under the bankruptcy law. He receives no unemployment or disability benefit. His sole assets are wearing apparel and $50 worth of essential household goods that are exempt under § 6 of the Act, 11 U. S. C. § 24, and under New York Civil Practice Laws and Rules § 5205 (1963). He has a couch of negligible value in storage on which a $6 payment is due monthly.
4. Because of his poverty, Kras is wholly unable to pay or promise to pay the bankruptcy fees, even in small installments. He has been unable to borrow money. The New York City Department of Social Services refuses to allot money for payment of the fees. He has no prospect of immediate employment.
5. Kras seeks a discharge in bankruptcy of $6,428.69 in total indebtedness in order to relieve himself and his family of the distress of financial insolvency and creditor harassment and in order to make a new start in life. It is especially important that he obtain a discharge of his debt to Metropolitan soon "because until that is cleared up Metropolitan will continue to falsely charge me with fraud and give me bad references which prevent my getting employment."
The District Court's opinion contains an order, 331 F. Supp., at 1215, granting Kras' motion for leave to file his petition in bankruptcy without prepayment of fees. He was adjudged a bankrupt on September 13,
III
In the District Court Kras first presented a statutory argument—and, alternatively, one based in common law—that he was entitled to relief from payment of the bankruptcy charges because of the provisions of 28 U. S. C. § 1915 (a).
The District Court rejected the argument despite the seeming facial application of § 1915 (a) to a bankruptcy proceeding as well as to any other. It reached this result by noting that § 51 (2) of the Bankruptcy Act, as originally adopted in 1898, 30 Stat. 558, had provided for a waiver of fees upon the filing of an affidavit of inability to pay; that by the passage of the Referees' Salary Bill in 1946, 60 Stat. 326, bankruptcy petitions in forma pauperis were abolished, H. R. Rep. No. 1037, 79th Cong., 1st Sess., 6 (1945); S. Rep. No. 959, 79th Cong., 2d Sess., 7 (1946); and that the 1946 statute, being later and having a positive and specific provision for postponement of fees in cases of indigency, overrode the earlier general provisions of § 1915 (a). 331 F. Supp., at 1209-1210. To the same effect are
The appellee may well have abandoned the argument on this appeal. Tr. of Oral Arg. 44-45. In any event, we agree, for the reasons stated by the District Court and by the courts in Garland and in the two Smith cases, supra, that § 1915 (a) is not now available in bankruptcy. See 2 W. Collier, Bankruptcy ¶ 51.01, pp. 1873-1874 (14th ed. 1971). Neither do we perceive any common-law right to proceed without payment of fees. Congress, of course, sometime might conclude that § 1915 (a) should be made applicable to bankruptcy and legislate accordingly.
The District Court went on to hold, however, 331 F. Supp., at 1210-1215, that the prescribed fees, payment of which was required as a condition precedent to discharge, served to deny Kras "his Fifth Amendment right of due process, including equal protection." Id., at 1212. It held that a discharge in bankruptcy was a "fundamental interest" that could be denied only when a "compelling government interest" was demonstrated. It noted, id., at 1213, that provision should be made by the referee for the survival, beyond bankruptcy, of the bankrupt's obligation to pay the fees. The court rested its decision primarily upon Boddie v. Connecticut, 401 U.S. 371 (1971), which came down after the First Circuit's decision in Garland, supra. A number of other district courts and bankruptcy referees have reached the same result.
IV
Boddie was a challenge by welfare recipients to certain Connecticut procedures, including the payment of court fees and costs, that allegedly restricted their access to the courts for divorce. The plaintiffs, simply by reason of their indigency, were unable to bring their actions. The Court reversed a district court judgment that a State could limit access to its courts by fees "which effectively bar persons on relief from commencing actions therein." 286 F.Supp. 968, 972. Mr. Justice Harlan, writing for the Court, stressed state monopolization of the means for legally dissolving marriage and identified the would-be indigent divorce plaintiff with any other action's impoverished defendant forced into court by the institution of a lawsuit against him. He declared that "a meaningful opportunity to be heard" was firmly imbedded in our due process jurisprudence, 401 U. S., at 377, and that this was to be protected against denial by laws that operate to jeopardize it for particular individuals, id., at 379-380. The Court then concluded that Connecticut's refusal to admit these good-faith divorce plaintiffs to its courts equated with the denial of an opportunity to be heard and, in the absence of a sufficient
But the Court emphasized that "we go no further than necessary to dispose of the case before us." Id., at 382.
MR. JUSTICE DOUGLAS, concurring in the result, rested his conclusion on equal protection rather than due process. "I do not see the length of the road we must follow if we accept my Brother HARLAN'S invitation." Id., at 383, 385. MR. JUSTICE BRENNAN concurred in part, for he discerned no distinction between divorce and "any other right arising under federal or state law" and he, also, found a denial of equal protection. Id., at 386, 387. Mr. Justice Black dissented, id., at 389, feeling that the Connecticut court costs were barred by neither the Due Process Clause nor the Equal Protection Clause of the Fourteenth Amendment.
Just two months after Boddie was decided, the Court denied certiorari in Garland. 402 U.S. 966. MR. JUSTICE
Thus, although a denial of certiorari normally carries no implication or inference, Chessman v. Teets, 354 U.S. 156, 164 n. 13 (1957); Brown v. Allen, 344 U.S. 443 (1953), the pointed dissents of Mr. Justice Black and MR. JUSTICE DOUGLAS to the denial in Garland so soon after Boddie, and Mr. Justice Harlan's failure to join the dissenters, surely are not without some significance as to their and the Court's attitude about the application of the Boddie principle to bankruptcy fees.
V
We agree with the Government that our decision in Boddie does not control the disposition of this case and that the District Court's reliance upon Boddie is misplaced.
A. Boddie was based on the notion that a State cannot deny access, simply because of one's poverty, to a "judicial proceeding [that is] the only effective means of resolving the dispute at hand." 401 U. S., at 376. Throughout the opinion there is constant and recurring reference to Connecticut's exclusive control over the establishment, enforcement, and dissolution of the marital
B. The appellants in Boddie, on the one hand, and Robert Kras, on the other, stand in materially different postures. The denial of access to the judicial forum in Boddie touched directly, as has been noted, on the marital relationship and on the associational interests that surround the establishment and dissolution of that relationship. On many occasions we have recognized the fundamental importance of these interests under our Constitution. See, for example, Loving v. Virginia, 388 U.S. 1 (1967); Skinner v. Oklahoma, 316 U.S. 535 (1942); Griswold v. Connecticut, 381 U.S. 479 (1965); Eisenstadt v. Baird, 405 U.S. 438 (1972); Meyer v. Nebraska, 262 U.S. 390 (1923). The Boddie appellants' inability to dissolve their marriages seriously impaired their freedom to pursue other protected associational
C. Nor is the Government's control over the establishment, enforcement, or dissolution of debts nearly so exclusive as Connecticut's control over the marriage relationship in Boddie. In contrast with divorce, bankruptcy is not the only method available to a debtor for the adjustment of his legal relationship with his creditors. The utter exclusiveness of court access and court remedy, as has been noted, was a potent factor in Boddie. But "[w]ithout a prior judicial imprimatur, individuals may freely enter into and rescind commercial contracts. . . ." 401 U. S., at 376.
However unrealistic the remedy may be in a particular situation, a debtor, in theory, and often in actuality, may adjust his debts by negotiated agreement with his creditors. At times the happy passage of the applicable limitation period, or other acceptable creditor arrangement, will provide the answer. Government's role with respect to the private commercial relationship is qualitatively and quantitatively different from its
Resort to the court, therefore, is not Kras' sole path to relief. Boddie's emphasis on exclusivity finds no counterpart in the bankrupt's situation. See Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 547-555 (1949).
D. We are also of the opinion that the filing fee requirement does not deny Kras the equal protection of the laws. Bankruptcy is hardly akin to free speech or marriage or to those other rights, so many of which are imbedded in the First Amendment, that the Court has come to regard as fundamental and that demand the lofty requirement of a compelling governmental interest before they may be significantly regulated. See Shapiro v. Thompson, 394 U.S. 618, 638 (1969). Neither does it touch upon what have been said to be the suspect criteria of race, nationality, or alienage. Graham v. Richardson, 403 U.S. 365, 375 (1971). Instead, bankruptcy legislation is in the area of economics and social welfare. See Dandridge v. Williams, 397 U. S., at 484-485; Richardson v. Belcher, 404 U. S., at 81; Lindsey v. Normet, 405 U.S. 56, 74 (1972); Jefferson v. Hackney, 406 U.S. 535, 546 (1972). This being so, the applicable standard, in measuring the propriety of Congress' classification, is that of rational justification. Flemming v. Nestor, 363 U.S. 603, 611-612 (1960); Dandridge v. Williams, 397 U. S., at 485-486; Richardson v. Belcher, 404 U. S., at 81.
E. There is no constitutional right to obtain a discharge of one's debts in bankruptcy. The Constitution, Art. I, § 8, cl. 4, merely authorizes the Congress to "establish. . . uniform Laws on the subject of Bankruptcies throughout the United States." Although the first bankruptcy law in England was enacted in 1542, 34 & 35 Hen. 8, c. 4, and a discharge provision first appeared
F. The rational basis for the fee requirement is readily apparent. Congressional power over bankruptcy, of course, is plenary and exclusive. Kalb v. Feuerstein, 308 U.S. 433, 438-439 (1940). By the 1946 Amendment, 60 Stat. 326, Congress, as has been noted, abolished the
Further, the reasonableness of the structure Congress produced, and congressional concern for the debtor, are apparent from the provisions permitting the debtor to file his petition without payment of any fee, with consequent freedom of subsequent earnings and of after-acquired assets (with the rare exception specified in § 70 (a) of the Act, 11 U. S. C. § 110 (a)) from the claims of then-existing obligations. These provisions, coupled with the bankrupt's ability to obtain a stay of all debt enforcement actions pending at the filing of the petition or thereafter
G. If the $50 filing fees are paid in installments over six months as General Order No. 35 (4) permits on a proper showing, the required average weekly payment is $1.92. If the payment period is extended for the additional three months as the Order permits, the average weekly payment is lowered to $1.28.
VI
Mr. Justice Harlan, in his opinion for the Court in Boddie, meticulously pointed out, as we have noted
We decline to extend the principle of Boddie to the no-asset bankruptcy proceeding. That relief, if it is to be forthcoming, should originate with Congress. See Shaeffer, Proceedings in Bankruptcy In Forma Pauperis, 69 Col. L. Rev. 1203 (1969).
Reversed.
MR. CHIEF JUSTICE BURGER, concurring.
I concur fully in the Court's opinion. The painstaking and precise delineation by Mr. Justice Harlan of the interests involved in Boddie v. Connecticut, 401 U.S. 371 (1971), ought not to be ignored as the dissenting opinions would do. Moreover, the exclusivity of a State's control of marriage and divorce is a far cry from the degree of government control over relations between debtor and creditor, as MR. JUSTICE BLACKMUN has pointed out. In a bankruptcy proceeding the government, through the court, is no more than the overseer and the administrator of the process; it is not the absolute and exclusive controller as with the dissolution of marriage. Like the descent and distribution of property for which all States have provided statutes and probate courts, the bankruptcy court is but one mode of orderly adjustment with creditors; it is not the only one since many debtors work out binding private adjustments with creditors.
MR. JUSTICE STEWART, with whom MR. JUSTICE DOUGLAS, MR. JUSTICE BRENNAN, and MR. JUSTICE MARSHALL join, dissenting.
On May 28, 1971, Robert Kras, the appellee, sought to file a voluntary petition in bankruptcy. In an accompanying affidavit, he described his economic plight. He resided in a 2 1/2-room apartment with his wife, his two young children, his mother, and her child. His eight-month-old son had cystic fibrosis and at the time of the
He sought a discharge from over $6,000 in debts, particularly his indebtedness to a former employer that he contended hampered his present efforts to find a permanent job: "I earnestly seek a discharge in bankruptcy . . . in order to relieve myself and my family of the distress of financial insolvency and creditor harassment and in order to make a new start in life. . . . When I do get a job I want to be able to spend my wages for the support of myself and my family and for the medical care of my son, instead of paying them to my creditors and forcing my family to remain dependent on welfare."
He indicated that he was unable to pay the $50 bankruptcy filing fee in a lump sum,
The District Court held that under the doctrine of Boddie v. Connecticut, 401 U.S. 371, the statutory requirement of a prepaid bankruptcy filing fee would violate Kras' Fifth Amendment right to due process of law. 331 F.Supp. 1207, 1212.
Boddie held that a Connecticut statute requiring the payment of an average $60 fee as a prerequisite to a divorce action was unconstitutional under the Due Process
The violation of due process seems to me equally clear in the present case. It is undisputed that Kras is making a good-faith attempt to obtain a discharge in bankruptcy, and that he is in fact indigent. As was true in Boddie, the "welfare income . . barely suffices to meet the costs of the daily essentials of life and includes no allotment that could be budgeted for the expense to gain access to the courts . . . ." Id., at 372-373.
And in the unique situation of the indigent bankrupt, the Government provides the only effective means of his ever being free of these Government-imposed obligations. As in Boddie, there are no "recognized, effective alternatives," id., at 376. While the creditors of a bankrupt with assets might well desire to reach a compromise settlement, that possibility is foreclosed to the truly indigent bankrupt. With no funds and not even a sufficient prospect of income to be able to promise the payment of a $50 fee in weekly installments of $1.28, the assetless bankrupt has absolutely nothing to offer his creditors. And his creditors have nothing to gain by allowing him to escape or reduce his debts; their only hope is that eventually he might make enough income for them to attach. Unless the Government provides him access to the bankruptcy court, Kras will remain in the totally hopeless situation he now finds himself. The Government has thus truly pre-empted the only means for the
The Government contends that the filing fee is justified by the congressional decision to make the bankruptcy system self-supporting.
The Bankruptcy Act relieves "the honest debtor from the weight of oppressive indebtedness and [permits] him to start afresh free from the obligations and responsibilities consequent upon business misfortunes," Williams v. United States Fidelity & Guaranty Co., 236 U.S. 549, 554-555. It holds out a promise to the debtor of "a new opportunity in life and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt." Local Loan Co. v. Hunt, 292 U.S. 234, 244. Yet the Court today denies that promise to those who need it most, to those who every day must live face-to-face with abject poverty—who cannot spare even $1.28 a week.
The Court today holds that Congress may say that some of the poor are too poor even to go bankrupt. I cannot agree.
MR. JUSTICE DOUGLAS and MR. JUSTICE BRENNAN, dissenting.
While we join MR. JUSTICE STEWART'S dissenting opinion we do so with this explicit statement of reasons. We said in Bolling v. Sharpe, 347 U.S. 497, 499, when holding
The invidious discrimination in the present case is a denial of due process because it denies equal protection within our decisions which make particularly "invidious" discrimination based on wealth or race.
MR. JUSTICE MARSHALL, dissenting.
The dissent of MR. JUSTICE STEWART, in which I have joined, makes clear the majority's failure to distinguish this case from Boddie v. Connecticut, 401 U.S. 371 (1971). I add only some comments on the extraordinary route by which the majority reaches its conclusion.
A. The majority notes that the minimum amount that appellee Kras must pay each week if he is permitted to pay the filing fees in installments is only $1.28. It says that "this much available revenue should be within his able-bodied reach." Ante, at 449.
Appellee submitted an affidavit in which he claimed that he was "unable to pay or promise to pay the filing fees, even in small installments." App. 5. This claim was supported by detailed statements of his financial condition.
Even if Kras' statement that he was unable to pay the fees was an honest mistake, surely he cannot have been mistaken in saying that he could not promise to pay the fees. The majority does not directly impugn his good faith in making that statement. Yet if he cannot promise to pay the fees, he cannot get the interim relief from creditor harassment that, the majority says, may enable him to pay the fees.
But beyond all this, I cannot agree with the majority that it is so easy for the desperately poor to save $1.92 each week over the course of six months. The 1970 Census found that over 800,000 families in the Nation had annual incomes of less than $1,000 or $19.23 a week. U. S. Bureau of Census, Current Population Reports, series P-60, No. 80; U. S. Bureau of Census, Statistical
It may be easy for some people to think that weekly savings of less than $2 are no burden. But no one who has had close contact with poor people can fail to understand how close to the margin of survival many of them are. A sudden illness, for example, may destroy whatever savings they may have accumulated, and by eliminating a sense of security may destroy the incentive to save in the future. A pack or two of cigarettes may be, for them, not a routine purchase but a luxury indulged in only rarely. The desperately poor almost never go to see a movie, which the majority seems to believe is an almost weekly activity. They have more important things to do with what little money they have—like attempting to provide some comforts for a gravely ill child, as Kras must do.
It is perfectly proper for judges to disagree about what the Constitution requires. But it is disgraceful for an interpretation of the Constitution to be premised upon unfounded assumptions about how people live.
B. The majority derives some solace from the denial of certiorari in In re Garland, 402 U.S. 966 (1971). Reliance
The point of our use of a discretionary writ is precisely to prohibit that kind of speculation. When we deny certiorari, no one, not even ourselves, should think that the denial indicates a view on the merits of the case. It ill serves judges of the courts throughout the country to tell them, as the majority does today, that in attempting to determine what the law is, they must read, not only the opinions of this Court, but also the thousands of cases in which we annually deny certiorari.
C. The majority says that "[t]he denial of access to the judicial forum in Boddie touched directly . . . on the marital relationship." It sees "no fundamental interest
However, I would go further than MR. JUSTICE STEWART. I view the case as involving the right of access to the courts, the opportunity to be heard when one claims a legal right, and not just the right to a discharge in bankruptcy.
The legal system is, of course, not so pervasive as to preclude private resolution of disputes. But private settlements do not determine the validity of claims of right. Such questions can be authoritatively resolved only in courts. It is in that sense, I believe, that we should consider the emphasis in Boddie on the exclusiveness of the judicial forum—and give Kras his day in court.
FootNotes
"a. At the first meeting of creditors or any adjournment thereof, the court . . . shall enter an order fixing the amount and date of payment of such installments. The final installment shall be payable not more than six months after the date of filing of the original petition; provided, however, that for cause shown the court may extend the time of payment of any installment for a period not to exceed three months.
"b. Upon the failure of a bankrupt . . . to pay any installment as ordered, the court may dismiss the proceeding for failure to pay costs as provided in Section 59, sub. g. of the Act. . . .
"c. No proceedings upon the discharge of a bankrupt . . . shall be instituted until the filing fees are paid in full."
The report of the commission is to be submitted prior to June 30, 1973. Pub. L. 92-251, 86 Stat. 63.
"Because of my poverty, I am wholly unable to pay or promise to pay the filing fees, even in small installments, as a condition precedent to discharge and also provide myself and my dependents with day-to-day necessities. I have been unable to borrow money from my family, relatives, or friends. One of the debts of which I seek a discharge in bankruptcy is a loan from my wife's grandmother. The New York City Department of Social Services refuses to allot money for payment of the bankruptcy filing fees. I have no prospect of immediate employment."
Moreover, there is no evidence that a substantial amount of revenue would be lost by allowing assetless indigents with no present prospects of paying the fee to file without prepayment. Any loss in fees that did result could be partly recouped by allowing the filing-fee debt to survive bankruptcy.
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