Thomas J. Tucker, United States Bankruptcy Judge.
This case is before the Court on the Debtor's motion filed March 9, 2020, 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 more than 13 months after this case was closed. The case was closed on January 16, 2019, without a discharge, due to the Debtor's failure to timely file the Certificate.
The Debtor filed a voluntary petition for relief under Chapter 7 on August 13, 2018, commencing this case. That same day, the Clerk issued a notice that the first meeting of creditors would be held on September 20, 2018 at 10:30 a.m. (Docket # 5, the "Notice"). On August 13, 2018, the Notice was served by the Bankruptcy Noticing Center by email on some of the creditors, the Chapter 7 Trustee, and the Debtor's attorney, and on August 15, 2018, the Notice was served by the Bankruptcy Noticing Center by mail on the Debtor and the remainder of the creditors (Docket # 6).
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 October 1, 2018 (Docket # 13). 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 October 3, 2018. (Docket # 14). The notice stated the following:
(Docket # 13) (emphasis in original) (footnote omitted).
The Debtor failed to file the Certificate by the November 19, 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 January 16, 2019, 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 # 18). Notice of the closing (Docket # 18) was served on the Debtor's counsel by e-mail on January 16, 2019, 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 January 18, 2019 on all creditors, and on the Debtor. (Docket # 19). 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 13 months later, on March 9, 2020, the Debtor filed the Motion (Docket # 21). The Motion states, in relevant part:
Also, on March 9, 2020, the Debtor filed a Certificate which states that "on February 27, 2020, the Debtor "completed a course on personal financial management given by telephone by Debt Education and Certification Foundation, a provider approved pursuant to 11 U.S.C. [§] 111 to provide an instructional course concerning personal financial management in the Eastern District of Michigan" (Docket # 20).
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 13 months ago; or (2) why the Debtor waited more than 13 months after this case was closed before she 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). The 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, 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) (applying 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.
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 Jones, 611 B.R. 279 (Bankr. E.D. Mich. 2020) (delay of more than 19 months); In re Lockhart, 582 B.R. 1 (Bankr. E.D. Mich. 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 re Garnett, 579 B.R. 818, 823 (Bankr. E.D. Mich. 2018) (delay of more than 5 and one half 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); In re Bragg, 577 B.R. 265 (Bankr. E.D. Mich. 2017) (delay of almost 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 a retroactive extension of over 13 months of the deadline to file the Certificate.
The Debtor has not provided a valid or reasonable explanation for her failure to timely comply with the financial course requirement. Nor has the Debtor provided a valid or reasonable explanation for the over 13-month delay in her seeking to reopen this case. This factor, therefore, weighs against granting the Motion.
The Motion provides no explanation whatsoever for her failure to comply with the financial management course requirement. The Motion also does not explain why the Debtor waited more than 13 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 January 18, 2019, that her case had been closed without a discharge, and why it had been so closed.
The delay of more than 13 month 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:
1. The Motion (Docket # 21) is denied.
2. The Debtor is not prohibited from filing a new bankruptcy case.