Motion for Relief -
In re McMinn, - B.R. , 2011 WL 2945787 (Bankr.
D. Kan. Jul 18, 2011) HELD: COURT COULD GRANT EXTENSION OF
STAY WITHOUT AN ACTUAL HEARING - MOTION FILED 2 DAYS PRIOR
TO 30TH DAY EXPIRATION
Automatic stay——Extension under Code § 362(c)(3): Although
the debtor filed her motion to extend the automatic stay
under Code § 362(c)(3) only two days before the time expired
to hold a hearing, the court could grant the motion without
holding a hearing in the absence of any objections.
While § 362(c)(3)(B) provides that the court may grant the
motion ““after notice and a hearing completed before the
expiration of the 30-day period,”” Code § 102(1) states that
““after notice and a hearing”” means ““such opportunity for
a hearing as is appropriate in the particular
circumstances,”” and this allows the court to expedite or
dispense with hearings when speed is essential.
CLICK FOR FOR TEXT OF OPINION
In re Ketaw, __ B.R. ___ case no. 1:11-bk-380)
(Bankruptcy Judge S. Martin Teel Jr.)
HELD: MOTION TO EXTEND STAY DENIED WHERE INSUFFICIENT TIME
TO HOLD HEARING
Motion to extend stay under Code § 362(c)(3) was not filed
in time to allow hearing:
The debtor's Emergency Motion to Extend the Automatic Stay
would be denied, as the motion was not filed in sufficient
time to permit, as required by Code § 362(c)(3)(B), an order
to issue “after notice and a hearing completed before the
expiration of the 30–day period” after the filing of the
case, where the debtor filed the motion at 5:47 p.m. on the
30th day after the commencement of the case.
As a practical matter, the 30–day deadline of § 362(c)(3)(B)
imposes upon the debtor's counsel these obligations:
·
A motion for relief under that provision must be filed with,
or promptly after, the filing of the debtor's petition.
·
The motion must include a notice under Local Bankruptcy Rule
9013–1(b)(3) and Local Official Form 3 of the opportunity to
oppose the motion.
·
The debtor's counsel must obtain a hearing date from the
clerk, and must give notice of that hearing with the filing
of the motion, or shortly thereafter, in order to assure
that, with reasonable advance notice to affected creditors,
any actual hearing is held prior to the expiration of the
30–day deadline.
CLICK FOR FULL TEXT OF OPINION
Community Discharge:
Subsection (a) of 11 U.S.C. §524 addresses the split
discharge, when only one spouse attains a discharge in
bankruptcy, in community property states. The legislative
history of this section says that "if community property was
in the [bankruptcy] estate and community claims were
discharged, the discharge is effective against the community
creditors of the nondebtor spouse as well as of the debtor
spouse. House Report No. 95-595, 95th Cong., 1st Sess.
365-6 (1977), Senate Report No. 95-989, 95th Cong., 2d Sess.
80 (1978). § 524(a)(3) treats the effect on the nondebtor
spouse of a discharge of a debtor in a community property
state when the nondebtor spouse is liable on the community
claim, but has not filed a bankruptcy petition. That is, if
one spouse in a community property state has commenced a
bankruptcy case where, as here, no claim is excepted from
the debtor's discharge and is not otherwise found to be
nondischargeable, and if the nondebtor spouse would not
have had a claim excepted from her discharge in a
hypothetical case commenced on the same day as the
commencement of the debtor's case, then the creditors of
either spouse holding community claims on the date of
bankruptcy are thereafter barred from asserting claims
against after acquired community property. It was the duty
of the scheduled creditors in the Braden Jay Karber
bankruptcy proceedings to object to the hypothetical
discharge of Valerie Karber, as the nondebtor spouse, within
the same time limits as their objections to the discharge of
Braden Jay Karber. 11 U.S.C. § 524(b). No such objections
were filed and thus all community creditors before the Court
in that case are now barred from seeking to collect their
deficiencies from the after acquired community property
of either Braden Jay Karber or Valerie Karber. In re Karber
25 B.R. 9, 12 (Bkrtcy.Tex.,1982) See also In re Dyson 277
B.R. 84 (Bkrtcy.M.D.La.,2002)
Branigan v. Bateman, No.
07-1030, 07-1307 (4th Cir Ct App, 2/4/08)
Orders denying motions to dismiss Chapter 13 petitions and
confirming debtors' plans are affirmed over claims that,
since the debtors are ineligible for discharges under 11
U.S.C. section 1328(f), they should not be allowed to file a
Chapter 13 petition. Not bad faith to file case where
no discharge can be entered. Time frame for filing
runs from date of Petition to date of Petition, not date of
discharge.
Creditor not listed in
chapter 7 bankruptcy, discharge entered - omission was unintentional:
9th Cir. No asset, ct declined to reopen – no need
to reopen because creditor suffered no prejudice; bankruptcy
proof of claim deadline has not come and gone.
In re Beezley, 994 F.2d 1433 (9th Cir. 1993)
see also State of Texas v Walker,
(5th
Circ 1998) - endorsed Beezley.
The First Circuit contrasted the Ninth Circuit's approach
with the Seventh Circuit's decision in In re Stark,
717 F.2d 322 (7th Cir. 1983) and went with the Seventh
Circuit's analysis. 2009 the First Circuit held that where
a claim is not listed and the creditor is not notified of
the bankruptcy, and does not otherwise learn of the
bankruptcy, the debt is not discharged due to section
523(a)(3)(A). Colonial Sur. Co. v. Weizman, 564 F.3d
526 (1st Cir. 2009). The First circuit recognized that the
Ninth Circuit had adopted a version of the "no harm, no
foul" approach to the discharge of unlisted claims in no
assets cases, which most circuits have followed as in
Beezley.
In re Lasko - failure to list
creditor, if no asset then debt is discharged.
In re Nielsen (09/07/04 - No.
02-35983, 9th Cir Ct. Apps) Failure to list a creditor in a
no-assets, no-bar-date Chapter 7 bankruptcy does not justify
revocation of the discharge.
http://caselaw.lp.findlaw.com/data2/circs/9th/0235983p.pdf
MCGHAN v. RUTZ (05/07/02 - No.
99-56956) (9th Cir Ct Apps) State courts lack 1)
jurisdiction to determine whether a listed and scheduled
creditor received adequate notice of discharge proceedings and
2) authority to modify bankruptcy court orders discharging a
claim and enjoining collection on a debt; bankruptcy court was
required to reopen proceedings to protect jurisdiction over
enforcement of its own orders.
http://caselaw.lp.findlaw.com/data2/circs/9th/9956956p.pdf
OMITTED CREDITORS IN CHAPTER 7 (as provided by Dan Furlong)
A debt is
discharged in most chapter 7 bankruptcy cases, even if the
debt is not listed in the bankruptcy and the creditor is not
notified of the bankruptcy. The following must apply:
1. The Court never set a deadline for creditors to file a
proof of claim. This is true in most cases, because they are
no asset cases. The unlisted creditor is not harmed, because
there was no distribution for the creditor to receive.
2. The creditor does not have the type of claim for which
the creditor could have filed a lawsuit in the bankruptcy
court to have the debt declared not discharged, such as for
fraud or intentional injury.
3. The creditor does not have the type of claim which is
never discharged, such as child support, spousal
maintenance, most taxes, etc.
The bankruptcy
courts will not normally allow a closed case to be reopened
for the purpose of listing an omitted creditor, since there
is no need.
If the court set a
deadline for filing proofs of claim, then the creditor is
not discharged if the creditor was not listed in the
bankruptcy and did not otherwise receive notice of the
bankruptcy in time to file a proof of claim.
It is the deadline
for the filing of a proof of claim that is important. It
does not matter whether the creditor would have received any
distribution from the trustee on the claim. It does not
matter that no distribution was made by the trustee to any
creditors. It does not matter if a distribution was made by
the trustee, which the omitted creditor would not have been
paid anything if a proof of claim had been timely filed.
(Such as if the distribution went all towards administrative
costs and priority claims.)
However, a
creditor, trustee, or any personal liable with the debtor on
a debt has 30 days after the normal deadline in which to
file a proof of claim on behalf of a creditor if a creditor
fails to do so by the normal deadline. If a debtor failed to
list a creditor, and the creditor did not know of the
bankruptcy, and there was a deadline to file a proof of
claim, and the creditor did not file a proof of claim by the
deadline, the creditor would be discharged if the debtor
filed a proof of claim on behalf of the creditor within the
extra 30 days. In re Hatley, 20 CBN 404 (Bankr. E.D.
Tenn. 2010).
The rules are
different for an omitted creditor that has the type of claim
for which the creditor could have filed a lawsuit in the
bankruptcy court to have the debt declared not discharged,
such as for fraud or intentional injury. Such an unlisted
creditor is not bound by the normal statute of limitations
to file a non-discharge suit, which is 60 days after the
meeting of creditors.
If this creditor is
not listed in the bankruptcy or did not otherwise receive
notice of the bankruptcy in time to file a non-discharge
suit, then this unlisted creditor is not discharged.
Rather, the debtor
loses the right to raise the deadline as a defense to such a
claim. The creditor still must file a suit under section 523
to determine the dischargeability of the debt. The debt is
not automatically excepted from discharge simply because the
creditor was not notified. If the creditor later learns of
the bankruptcy, the creditor must then file a complaint and
prove the debt is the type of debt not discharged before the
creditor takes additional collection actions.
The creditor may
lose the right to file the 523 suit if the creditor waits an
unduly long period of time after learning of the bankruptcy.
Under certain limited circumstances, laches may bar the 523
complaint. In re Staffer, ______F.3d _______, 9th
Cir. September 27, 2002; Beaty v. Selinger, ______F.3d
_______, 9th Cir. September 26, 2002. The suit may possibly
be filed in state or bankruptcy court.
(One court has
ruled that the debt is not discharged if the debtor
intentionally failed to list the debt in time for the
creditor to file a complaint objecting to discharge before
the deadline, and if this is proven, then the creditor need
not prove the debt is the type of debt not discharged. (see
Chart #2) In re Paylan, 18 CBN 1113 Bankr. M.D. Fla.
2008). Collateral estoppel or issue preclusion applies only
if the issue was actually litigated. A default judgment is
not litigated.
Therefore an
Arizona state court default judgment for fraud does not
establish fraud in a later non-discharge suit in bankruptcy
court under sec 523. Weber vs. Grindle Audio Productions,
Inc.,
1CA-CV, 02-0008,
Ariz. Court Of Appeals, November 21, 2002.
The difficulty is
convincing an omitted creditor that its claim was discharged
and that the post-discharge injunction of 11 USC §524
prohibits collection efforts. At a minimum the creditor
should be sent a letter advising of the law and the court
rulings, which are in the following cases. The debtor may
re-open the bankruptcy and request sanctions against a
creditor that refused to stop collection efforts.
In re Beezley,
994 F.2d 1333, 9th Cir. 1993;
In re Neilsen,
02-35983, 9th Cir. filed September 7, 2004.
Weber vs. Grindle Audio Productions, Inc., 1CA-CV, 02-0008,Ariz.
Court Of Appeals,
November 21, 2002.
Jones V. Warren Construction,
No. 302-09099, Adv. No. 30-0216A,
Judge Keith Lundin,
Bankruptcy Court, Middle District of Tennessee, August 6,
2003.
In re Staffer,
______F.3d _______, 9th Cir. September 27, 2002;
Beaty v. Selinger,
______F.3d _______, 9th Cir. September 26, 2002
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