§ 727(a)(11) and I.B.R. 1007(c) - REOPENING OF CASE
TO FILE FINANCIAL MANAGEMENT COURSE CERTIFICATE

In re Thompson, Case No. 05-76905 (Bankr. N.D. Ohio April 6, 2006) (J. Whipple). The debtor’s case was closed without discharge pursuant to his failure to file a personal financial management course certificate post-petition. The debtor subsequently filed a motion to reopen the case with the appropriate filing fee, stating the purpose for reopening was to allow the debtor to file a statement of completion of the personal financial management course.

The Court looked to the permissible grounds for reopening a case under 11 U.S.C. § 350(b), noting that one of the grounds is “to accord relief to the debtor.” The Court extrapolated from the debtor’s request that he was requesting an extension of time provided by Interim Bankruptcy Rule 1007(c) for the filing of the certificate. The Court noted that two things were not addressed by the debtor: (1) Rule 1007(c) provides that an extension of time for filing the instructional course certificate may only be made “on motion for cause shown and on notice to the United States trustee, . . . [and to the] trustee . . ., or other party as the court may direct.” Additionally, since the time period within which the certificate had to be filed had expired, the Court found that Rule 9006(b)(1) applied, permitting the Court to only enlarge the time where the failure to act timely was a result of excusable neglect.

The Court granted the motion to reopen but required the debtor to file a motion complying with Rule 1007(c) and 9006(b)(1), stating both the cause and the grounds for a finding of excusable neglect that would permit the extension of time to file the certificate after the time for filing had already expired and noticing the United States Trustee, the Chapter 7 Trustee, and all creditors.

COMMENT: It has come to the commentator’s attention that not filing the financial management course certificate might be a benefit for some debtors; specifically, those debtors who incur a large obligation, such as a medical expense, shortly after filing for Chapter 7 relief. If the financial management certificate is not filed, 11 U.S.C. § 727(a)(11) requires that the case be closed without a discharge being granted. Section 727(a)(8) only prevents a debtor from receiving a discharge within 8 years of the filing of a case in which the debtor received a discharge. Thus, once the original case is closed, there is nothing to prevent the debtor from refiling under Chapter 7 and receiving a discharge for the new obligation.

It should be noted that 11 U.S.C. § 523(a)(10) prevents a discharge of debt for which the debtor was denied a discharge under 11 U.S.C. §§ 727(a)(2) through (7), but this section says nothing about a § 727(a)(11) denial of discharge. Section 523(a)(10) does prohibit the discharge of debts for which the debtor waived discharge. However, since § 727 contains a specific provision allowing a debtor to affirmatively waive discharge via a written waiver approved by the court, a failure to file a financial management course certificate should not be construed as such a waiver.

Aaron Ridenbaugh