In re Judson
In re Judson
Opinion of the Court
The Court has considered the Motion to Reopen filed by Debtors Kenneth and Carol Judson ("Debtors") on July 11, 2018 [Dk. 18]
1. Brief Statement of Facts
Debtors filed their Chapter 7 case on May 4, 2012 and received a discharge on August 13, 2012. Dk. 15. Their case was closed on August 16, 2012. Dk. 17. Debtors now seek to reopen their case to file a reaffirmation agreement reaffirming their home mortgage debt, or, alternatively, obtain an order from this Court compelling Ocwen Loan Servicing, LLC ("Ocwen") to report all payments made to the credit bureau.
2. Legal Analysis
a. Reopening Closed Cases
Under
Bankruptcy Courts have broad discretion to determine whether to reopen a case. E.g. , In re Welch , No. BK 11-18277-LBR,
A bankruptcy case should not be reopened if doing so is futile. In re Smyth ,
b. The Court may not approve a reaffirmation agreement entered into after discharge was granted.
With respect to Debtors' request to reopen the case to file a reaffirmation agreement, Debtors have not presented any legal basis for granting the relief sought. The only way to resuscitate a debt otherwise dischargeable in bankruptcy is to enter into a reaffirmation agreement under
There are very limited exceptions to the timing requirement, none of which apply here. Courts have allowed debtors to reopen their case to file a reaffirmation agreement that was made before entry of discharge. See In re Davis ,
Some courts have exercised their equitable powers to vacate the discharge to allow entry of a reaffirmation agreement. See In re Bellano ,
In this case, Debtors received their discharge nearly six years before this Motion was filed. There is no authority under the Bankruptcy Code for the Court to approve a reaffirmation agreement entered into six years after discharge was entered. Debtors do not seek to vacate their discharge to allow entry into and approval of a reaffirmation agreement. Even if they did, it would be inequitable to do so because Debtors have been relieved of any personal *774liability on all of their discharged debts, including the mortgage loan, for six years.
Thus, Debtors have not demonstrated, pursuant to § 350(b), that filing a reaffirmation agreement is "cause" to reopen this case.
c. Debtors have not provided any legal authority demonstrating that the Court has jurisdiction to enter an order post-discharge granting relief based solely in state law.
With respect to Debtors' request that if the case were reopened, they would seek an order from this Court compelling Ocwen Loan Servicing, LLC to report all payments made to the credit bureau, Debtors have not presented any legal authority establishing this Court has jurisdiction to grant the relief requested after discharge has been entered and the case closed. Bankruptcy courts' jurisdiction is limited to "core" matters that arise under Title 11 or arise in a case under Title 11, and on a lesser basis, noncore matters that are "related-to" cases under Title 11.
Here, all of the legal authority cited in the underlying motion is state law. It is, at best, subject to "related-to" jurisdiction. Debtors have not demonstrated a close nexus to the six-year-old bankruptcy case to establish jurisdiction over these claims.
While a violation of the discharge injunction would be a core proceeding over which this Court clearly has jurisdiction, Debtors are not asserting such a violation. Even with liberal interpretation, the Court cannot infer a violation of the discharge injunction from the papers before it. In particular, the email from Ocwen attached to the Motion as Exhibit B is not sufficient to establish that violation of the discharge injunction occurred. In response to Debtors' request to report payments, Ocwen responded: "As per our records, during bankruptcy chapter 07, you had never reaffirmed with prior servicer. Hence we cannot report the loan as reaffirmed." Motion, Ex. B, Dk. 18, pg. 15. Ocwen's statement appears to be merely an accurate statement of facts: Debtors did not reaffirm the loan, and therefore Ocwen cannot report the loan to the credit bureaus as having been reaffirmed. Debtors have not presented any evidence that demonstrates Ocwen pressured Debtors into reaffirming a discharged debt post-petition or otherwise violated the discharge injunction.
Debtors have not provided any legal support to establish that this Court has jurisdiction, post-discharge, to enforce state law reporting requirements under these circumstances. Thus, Debtors have not demonstrated, pursuant to § 350(b), "cause" to reopen their case.
3. Conclusion
For the foregoing reasons, no valid reaffirmation agreement may be entered into or filed and the Court does not have jurisdiction over the state law claims. In short, reopening the case for either of these purposes would be futile. Thus, there is no cause to reopen the Debtor's bankruptcy case. The Motion is DENIED without prejudice.
ECF docket entries for this bankruptcy case, In re Judson , Case No. 6:12-bk-21167, are cited as "Dk."
Reference
- Full Case Name
- IN RE Kenneth L. JUDSON, Carol L. Judson, Debtors.
- Cited By
- 7 cases
- Status
- Published