Judge Thomas J. Tucker.
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 case, 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.
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 Decree 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 on 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 later, 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 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
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 Barrett, 569 B.R. 687, 690-92 (Bankr. E.D. Mich. 2017) (apply a 4-part test and 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 8 years after the case was closed, and stating: "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."); In re Chrisman, No. 09-30662, 2016 WL 4447251, at *2-3 (Bankr. N.D. Ohio Aug. 22, 2016) (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 McGuinness, No. 08-10746, 2015 WL 6395655, at *2, 4 (Bankr. D.R.I. Oct. 22, 2015) (more than 7 year delay); In re Johnson, 500 B.R. 594, 597 (Bankr. D. Minn. 2013) (more than 4 year delay); cf. In re Heinbuch, No. 06-60670, 2016 WL 1417913, *3-4 (Bankr. N.D. Ohio April 7, 2016) (approximately 7 year delay).
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, 569 B.R. at 688 (delay of more than 8 years); In re Rondeau, 574 B.R. 824 (Bankr. E.D. Mich. 2017) (delay of more than 3 years); In re Wilson, 575 B.R. 783 (Bankr. E.D. Mich. 2017) (delay of almost 15 months); In re Whitaker, 574 B.R. 819 (Bankr. E.D. Mich 2017) (delay of 11 months).
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.
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 Motion 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.
The delay of approximately 11 months 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 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 significant. This factor strongly weighs in favor of denying the Motion.
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 complete the Financial Management Course and to file a Certificate was entirely due to the
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, although shorter than the delay in Chrisman, 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. Accordingly,
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.
