United States District Court, E.D. Virginia, Alexandria Division
MEMORANDUM OPINION & ORDER
O'Grady United States District Judge
matter comes before the Court on appeal from the bankruptcy
court's denial of Mr. Smith's motion to reopen his
bankruptcy case, which was closed without discharge after Mr.
Smith failed to timely file a Certificate of Completion of
Financial Management Course. The issue on appeal is:
"Whether the bankruptcy court abused its discretion by
denying Mr. Smith's motion to reopen his case, seven
years after it was closed, so that he could file an untimely
certificate of completion of a required financial management
course and obtain a discharge of his debts." Appellee
Br. at 2.
obtain a discharge through bankruptcy, debtors are required
to complete a personal financial management course and file a
certification of completion of the course with the bankruptcy
court. 11 U.S.C. § 727(a)(11); Fed. R. Brankr. P.
4004(c)(1)(H). Mr. Smith was given notice of this requirement
on October 22, 2010. UST 000047-48. On April 13, 2011, Mr.
Smith's bankruptcy case was closed without discharge
because Mr. Smith had failed to timely file the required
course certification. Br. Dkt. 135. Mr. Smith was given
notice that his case was closed on April 15, 2011. Br. Dkt.
four months later, Mr. Smith completed the required personal
financial management course. Dkt. 11 at 10 (Certificate of
Debtor Education dated August 3, 2011). Mr. Smith did not
move to reopen his bankruptcy case at that time because he
"lacked the funds necessary to reopen the case."
Dkt. 11 at 4.
Mr. Smith waited until July 27, 2018 - over seven years after
his case was closed - to file his certification and move to
reopen the bankruptcy case. Br. Dkt. 137-38. The bankruptcy
court denied Mr. Smith's motion to reopen the case at a
hearing on August 28, 2018 and issued the appealed Order
three days later. Br. Dkt. 144-45.
Smith timely filed the present appeal on September 17, 2018.
In his appeal, Mr. Smith states that he "is aware of the
timelines and Bankruptcy rules." Dkt. 11 at 3. He
further explains that "the deadlines were not missed due
to negligence" because it was his "original
intention not to discharge debt but to repay all creditors
with anticipated funds." Id. Mr. Smith now
seeks to reopen his bankruptcy case because his creditors are
demanding his non-discharged debts and it would be less
burdensome to reopen his 2009 bankruptcy case than to file a
new bankruptcy case. Id. at 4.
STANDARD OF REVIEW
bankruptcy court's denial of a motion to reopen a closed
bankruptcy case can be reversed only for abuse of discretion.
Hawkins v. Landmark Fin. Co., 727 F.2d 324, 326-27
(4th Cir. 1984). A court "abuses its discretion only if
its conclusions are based on mistaken legal principles or
clearly erroneous factual findings." People for
Ethical Treatment of Animals v. Doughney, 263 F.3d 359,
370 (4th Cir. 2001).
determining whether good cause exists to reopen a closed
bankruptcy case to allow a debtor to file a late financial
course certification, courts generally consider the following
four factors: (1) whether the debtor has a reasonable
explanation for the failure to comply with the financial
course certification requirements, (2) whether the fault for
the delay lies with counsel, (3) whether the request to
reopen was timely, and (4) whether creditors will be
prejudiced if the case is reopened. See, e.g., In re
Lockhart, 582 B.R. 1, 4 (E.D. Mich. 2018); In re
Chrisman, 2016 WL 4447251, at *2 (N.D. Ohio Aug. 22,
2016). The bankruptcy court's decision not to
reopen Mr. Smith's bankruptcy case is supported by all
Mr. Smith has not provided a reasonable explanation for his
failure to comply with the financial course certification
requirements. At the bankruptcy court, Mr. Smith claimed that
his failure to comply with the certification requirements was
because he had taken the course using his business's name
and the certification from that course was rejected. UST
000052 (motion to reopen); UST 000072-73 (bankruptcy court
hearing transcript). Mr. Smith's explanation is not
corroborated by the record below. See UST 000001-22
(bankruptcy docket sheet); UST 000073 (Judge Kenney
explaining that the docket does not show that any
certifications were filed). Furthermore, the explanation Mr.
Smith gave to the bankruptcy court for his noncompliance and
delay does not explain either why he waited almost four
months after receiving notice that the case was closed to
take the required course or why he waited almost another
seven years to move to reopen his case.
Smith's new explanations on appeal also do not provide
good cause for his noncompliance. Mr. Smith admits that he
was aware of the bankruptcy requirements and deadlines, and
that his failure to file the certification was intentional.
Mr. Smith's financial difficulties at the time do not
excuse his failure to file the certification and move to
reopen his case in 2011.
Mr. Smith's failure to timely comply with the education
and certification requirements was not due to the fault of
any counsel as Mr. Smith was proceeding pro se
during the relevant times of his bankruptcy case. Debtors are
not excused from the education and certification requirements