One of the goals of BAPCPA (the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005) was to prevent abuse by debtors. One of those abuses targeted were “repeat filers” and another was the failure to file documents. If schedules and other documents are not timely filed, the court is obligated to dismiss the bankruptcy case. A debtor out of the Northern District of Alabama recently learned what happens when you do not adhere to the requirements of the code.
The debtor filed her case on August 2, 2007 (which was also the same day as a scheduled foreclosure) along with an application to pay her filing fee in installments. The next day, the court issued a notice to the debtor’s attorney identifying the deficiencies with the petition. Only 7 days later, the debtor’s attorney sought permission to cease representation because of a failure to communicate and cooperate. Counsel also sought an extension for the debtor to file her schedules. The attorney’s request was allowed, and the deadline to file schedules was extended to September 17. The creditor’s meeting, originally set for September 7 was rescheduled for September 28.
Through her new attorney, the debtor filed her schedules. However, she did not file a plan. She did not file any evidence of income. She did however, file a motion to dismiss her case on September 27, 2007 on the basis that she was in direct negotiations with her lender. She didn’t bother attending the creditor’s meeting, which prompted the trustee to seek dismissal based on her failure to attend. The case was dismissed on October 9.
On November 30, the debtor filed another case, this time without counsel. Again, she only filed the petition and no schedules. And again, she also filed an application to pay her filing fee in installments which the court denied because she didn’t pay the fees from her first case. On that same day, the clerk sent a notice of deficiency as well as an order to the debtor to show cause why the case should not be dismissed due to her failure to pay the fee. A hearing on the order to show case was set for December 17. She didn’t show up for the hearing. The case was dismissed.
On December 21, the debtor paid the filing fee, asked that the dismissal be set aside, and requested that the court extend the automatic stay. After a hearing on December 27, the court set aside the dismissal.
Then, a creditor’s meeting was rescheduled, then canceled and then rescheduled again. A new attorney appeared. And ultimately, the debtor never bothered to file her employee records or payment advices until February 18.
Under Section 521(i) a bankruptcy case is automatically dismissed if the debtor fails to file these documents within 45 days (in Massachusetts, they are not filed on the docket, but they must be provided to the trustee in a timely manner…and that does not mean walking into the creditor’s meeting with them in hand). The code provides that the case is automatically dismissed on the 46th day. And the code requires the court to enter an order dismissing the case within 5 days of a request to dismiss for failing to file these documents. The code also allows the court to allow the case to remain in chapter 13 if the debtor can establish that she attempted in good faith to file the documents, and the creditors would be served by administration of the case.
Since a creditor filed the motion to dismiss, the court interpreted this code provision as an invitation to the chapter 13 trustee to file a motion asking that the case not be dismissed. This did not happen. Thus, the debtor’s case – her second one – was dismissed….and for no other reason than because a required document was not filed on time.
The case is In re Evans, 07-72142, US Bankruptcy Court, N.D. Alabama (Western Division), June 12, 2008
Related posts:
- Why Bankruptcy Lawyers Require Fees Before Filing
- Furnishing Tax Returns to Creditors
- Would-a, Should-a, Could-a.
- Destroyed Documents leads to Denial of Discharge
- The Two Edge’s of BAPCPA’s Sword
Tags: Bankruptcy Abuse Prevention & Consumer Protection Act of 2005, Chapter 7
