Contact: John Hartgen
703-739-0800
RESPONDENTS
DIVIDED OVER WHETHER COURTS MAY REFUSE TO ENFORCE AUTOMATIC DISMISSAL TO
ALLOW TRUSTEE TO LIQUIDATE UNDISCLOSED ASSET
February 12, 2008,
Alexandria, Va. — Respondents to the latest ABI Quick
Poll were divided over whether a court could refuse to enforce the
automatic dismissal of a chapter 7 case when the debtor did not file
complete evidence of payments from employers but did disclose a
previously undisclosed valuable asset after the 45-day deadline for
automatic dismissal expired. Forty-two percent of respondents agreed
that a court cannot excuse a debtor from filing complete evidence of
employer payments after the 45-day window for automatic dismissal has
expired. Twenty-two percent “somewhat agreed” and 20 percent
“strongly agreed.”
Thirty-four percent of
respondents, however, thought that a court can prevent
color='black'>automatic dismissal of a chapter 7 case after the 45-day
period by excusing a debtor who did not file complete evidence of
employer payments. Twenty-seven percent “strongly disagreed”
and 7 percent “somewhat disagreed.”
color='black'> Twenty-one percent of respondents did not know or
had no opinion on the issue.
In the case of In re Ivan
Acosta Rivera and Ana A. Balseiro Chacon v. Wilfredo Segarra Miranda and
Nancy Pujals, the debtors did not disclose a significant asset of
the estate, a lawsuit, until after the passing of the 45-day period for
“automatic dismissal” under the Bankruptcy Abuse Prevention
and Consumer Protection Act of 2005 (11 U.S.C. §521(i)(1)).
Upon learning that the case trustee was going to settle the
lawsuit for less than the debtors had expected, the debtors moved to
dismiss their own case for having failed to file complete evidence of
payments from employers as required by 11 U.S.C. §521(a). The
U.S. Trustee argued that the court could “order otherwise”
under §521(a)(1)(B) and excuse the filing of complete evidence of
payments.
ABI members and members of the
public were welcome to submit their response to the statement: “If
chapter 7 debtors amend their schedules to list a valuable cause of
action after the 45-day period for automatic dismissal expires, the
bankruptcy court may not “order…otherwise” to excuse
compliance with the requirement of filing payment advices and deny
debtors’ motion to dismiss, which debtors filed after the trustee
settled the cause of action (Ivan Acosta Rivera and Ana A. Balseiro
Chacon v. Wilfredo Segarra Miranda and Nancy Pujals, D. Puerto Rico,
Civil No. 07-1301, 10/12/07).”
size='3'>ABI
title='blocked::http://www.abiworld.org/'
href='http://www.abiworld.org/'>www.abiworld.org.
w:st='on'>ABI
respond to a question on a timely bankruptcy or insolvency issue. Visit
href='http://www.abiworld.net/quickpoll/'>
color='#0000ff'>http://www.abiworld.net/quickpoll/ to access
the results of previous
Quick Polls.
###
size='3'>ABI
nonpartisan organization dedicated to research and education on matters
related to insolvency.
was founded in 1982 to provide Congress and the public with unbiased
analysis of bankruptcy issues. The
w:st='on'>ABI
attorneys, accountants, bankers, judges, professors, lenders, turnaround
specialists and other bankruptcy professionals, providing a forum for
the exchange of ideas and information. For additional information on
For additional conference information, visit
title='blocked::http://www.abiworld.org/conferences.html'
href='http://www.abiworld.org/conferences.html'>
color='#0000ff'>http://www.abiworld.org/conferences.html.