Dismissing a petition sua sponte was error because the bankruptcy court did not explicitly tell the pro se debtor that he could request a hearing, according to a decision by District Judge Jackson L. Kiser of Danville, Va.
The debtor was a so-called serial filer. He had previously filed eight petitions in two states. He dismissed some voluntarily, and the courts dismissed the others for failure to comply with orders and rules. The most recent prior dismissal was coupled with a 180-day bar to refiling.
In the new case that went up on appeal, the debtor had filed a motion for permission to pay the filing fee in installments. The bankruptcy court granted an extension to pay the filing fee but also entered an order directing the debtor to pay the $75 administrative notice fee.
The order said that failure to pay the notice fee in two weeks “may result in dismissal of the case without further notice or hearing.”
When the debtor failed to pay the $75 fee, the bankruptcy court dismissed the petition without holding a hearing.
The debtor appealed and won in Judge Kiser’s Sept. 29 opinion.
Section 707(a)(2) permits dismissal for failure to pay a fee, but “only after notice and a hearing.” If no one requests a hearing, Judge Kiser acknowledged that Section 102 allows the court to act without a hearing even if the Bankruptcy Code calls for “notice and a hearing.”
It was error to dismiss the petition even though the debtor did not request a hearing, Judge Kiser said, because the notice did not inform the pro se debtor of his right to request a hearing.
Judge Kiser found support for his conclusion in a 2002 decision by District Judge Lewis A. Kaplan in New York, who set aside dismissal because the bankruptcy court had not advised a pro se debtor of the right to a hearing.