Thomas J. Tucker, United States Bankruptcy Judge.
This case is before the Court on the Debtor's motion filed February 3, 2020, entitled "Motion To Reopen Case and Waive Reopen Fee" (Docket # 22, 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 19 months after this case was closed. The case was closed on June 13, 2018, without a discharge, due to the Debtor's failure to timely file the Certificate. The Motion also seeks a waiver of the filing fee for the Motion. For the following reasons, the Court will deny the Motion in its entirety.
With the assistance of her attorney, the Debtor filed a voluntary petition for relief under Chapter 7 on February 23, 2018, commencing this case. That same day, the Clerk issued a notice that the first meeting
Under Fed. R. Bankr. P. 1007(b)(7)(A),
Although not required to do so, the Clerk of this Court reminded the Debtor and her attorney of the need to file the Certificate, and of the deadline for doing so, by a notice issued on April 13, 2018 (Docket # 16). The same day, that notice was served on the Debtor's attorney electronically, through the Court's ECF system. And the notice was mailed to the Debtor by the Bankruptcy Noticing Center on April 15, 2018. (Docket # 17). The notice stated the following:
(Docket # 16) (emphasis in original) (footnote omitted).
The Debtor failed to file the Certificate by the May 29, 2018 deadline, or at anytime thereafter while the case remained open. The Debtor also failed to file a motion to extend the deadline to file the Certificate.
On June 13, 2018, after the case had been fully administered, the case was closed without a discharge, due to the Debtor's failure to file the Certificate. (Docket # 20). Notice of the Final Decree entered that day (Docket # 21) was served on Debtor's counsel by e-mail on June 13, 2018, 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 June 15, 2018 on all creditors, and on the Debtor. (Docket # 21). 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.)
More than 19 months later, on February 3, 2020, the Debtor filed the Motion (Docket # 22). The Motion states, in relevant part: "I didn't do my certi[fi]cate of debtor education. [I] thought [I] completed this it totally slipped my mind [I] never know my case wasn't discharged until recently. My lawyer explained what [I] needed to do." (Mot. at ¶¶ 1-2.) Also on February 3, 2020, the Debtor filed a Certificate indicating that she took the financial management course on January 27, 2020 (Docket # 23.)
The Motion does not allege or demonstrate any valid excuse, (1) why the Debtor failed to timely complete the financial management course and file the required Certificate, more than 19 months ago; (2) why the Debtor waited more than 20 months after the deadline to complete the financial management course; or (3) why the Debtor waited more than 19 months after this case was closed before she moved to reopen it.
Section 350(b) of the Bankruptcy Code, Bankruptcy Rule 5010,
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, including cases decided by the undersigned judge, 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 relatively 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 the 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); 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); In re McGuiness, 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).
This Court has denied motions to reopen in several cases, where the delay ranged from 10 months to more than 8 years. See In re Lockhart, 582 B.R. 1, 6 (2018) (delay of more than 1 year); Barrett, 569 B.R. at 688 (delay of more than 8 years); In re Szczepanski, 596 B.R. 859 (Bankr. E.D. Mich. 2019) (delay of more than 15 months); In re Kessler, 588 B.R. 191 (Bankr. E.D. Mich. 2018) (delay of 5 years); In re Moore, 591 B.R. 680 (Bankr. E.D. Mich. 2018) (delay of 10 months); In
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 retroactive extension of more than 20 months of the deadline to file the Certificate.
The Motion does not allege or demonstrate any valid excuse, (1) why the Debtor failed to timely complete the financial management course and file the required Certificate, more than 20 months ago; or (2) why the Debtor waited more than 19 months after this case was closed before she moved to reopen it. This factor, therefore, weighs against granting the Motion.
The Motion indicates, in relevant part, that the Debtor was under the mistaken belief that she had completed her financial management course, that she forgot about this requirement, and that she did not know that her case was not discharged until recently. Even assuming that the Debtor's statements in the Motion are true, and that the Debtor, at some point, mistakenly believed that she had complied with the financial management requirement to obtain a discharge before her case was closed, she cannot reasonably and credibly allege that she still believed that after she received the Notice of the Final Decree in June 2018, which clearly stated that her case had "been closed without entry of discharge" because the Debtor "did not file Official Form 423, Certification About a Financial Management Course." And in this case the Debtor was represented by an attorney, who also received this notice, by e-mail on June 13, 2018.
The Motion also does not explain why the Debtor waited more than 19 months after the case was closed to move to reopen the case, and take the financial management course. As already stated, the Debtor was informed, by the notice described above, which was mailed to her on June 15, 2018, that her case had been closed without a discharge, and why it had been so closed.
The delay of more than 19 months in both the Debtor's completion of the financial management course and in filing the Certificate in this case is far 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 Debtor's delay in this case is significant, and this factor strongly weighs against granting 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 her failure to timely complete the Financial Management Course and to file a Certificate was the fault of her counsel. The fault for failing to timely complete the Financial Management Course and to file a Certificate was entirely due to the Debtor's own fault and neglect. This factor weighs against granting 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, although shorter than the delay in Chrisman, is still very 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: