In re Bell

617 B.R. 364

IN RE: Kevin Lewis BELL, Debtor.

Bankruptcy Case No. 19-20596 TBM

United States Bankruptcy Court, D. Colorado.

Signed April 23, 2020

Kevin Lewis Bell, Denver, CO, pro se.

ORDER DENYING MOTION TO DISMISS AND GRANTING EXTENSION OF DEADLINE TO OBJECT TO DISCHARGE AND DISCHARGEABILITY OF DEBTS

Thomas B. McNamara, United States Bankruptcy Judge

I. Introduction.

Debtor, Kevin Lewis Bell (the "Debtor"),¹ filed for protection under Chapter 7 of the Bankruptcy Code.² According to the Debtor's financial disclosures, she is quite impoverished. Her case appears to be a classic "no-asset" proceeding in which creditors likely will receive nothing. The United States Trustee appointed Harvey Sender as the Chapter 7 Trustee (the "Chapter 7 Trustee") for the Bankruptcy Estate of the Debtor.

Chapter 7 trustees are an indispensable part of the bankruptcy system.

Under the Bankruptcy Code, Chapter 7 trustees are required to "investigate the financial affairs of the debtor," "collect and reduce to money the property of the estate," and perform a myriad of other critical functions.³ It is hard work for which Chapter 7 trustees receive little credit and often are poorly compensated.

One of the key early events in every consumer bankruptcy proceeding is a mandatory examination of the debtor: the so-called "Section 341 Meeting". 11 U.S.C. §§ 341 and 343. The debtor must appear and answer questions posed by a Chapter 7 trustee and creditors. The Section 341 Meeting is one of the main avenues available to Chapter 7 trustees to perform their duty of "investigat[ing] the financial affairs of the debtor."

In this bankruptcy case, the Debtor appeared very late for her initial Section 341 meeting. So, the Chapter 7 Trustee was not able to examine the Debtor. He rescheduled the Section 341 Meeting. At the continued Section 341 Meeting, the Debtor appeared on time. When the Chapter 7 Trustee asked for her identification, the Debtor produced her Colorado Driver's License but did not have her Social Security Card. Her failure to produce "evidence of [her] social security number" violated a procedural rule: Fed. R. Bankr. P. 4002(b)(1). The Debtor asked to provide her Social Security Card later. The Chapter 7 Trustee refused and did not conduct any examination of the Debtor at the Section 341 Meeting. Instead, he filed a "Motion to Dismiss Voluntary Petition and Extend the Deadline to Object to Discharge or to Challenge Whether Certain Debts are Dischargeable." (Docket No. 16, the "Motion to Dismiss.") Thereafter, the Debtor objected to dismissal and provided a copy of her Social Security Card. She wants to complete the bankruptcy process and receive a discharge. In the end, the issue is whether the Court should take the fairly draconian step of dismissing the Debtor's Chapter 7 bankruptcy case merely because she did not bring her Social Security Card to the Section 341 Meeting and instead provided it later.

II. Jurisdiction and Venue.

This Court has jurisdiction to enter final judgment on matters involving the administration of the bankruptcy process pursuant to 28 U.S.C. § 1334. The issue in dispute is a core proceeding under 28 U.S.C. § 157(b)(2)(A) which governs "matters concerning administration of the estate." Venue is proper in this Court pursuant to 28 U.S.C. §§ 1408 and 1409.

III. Procedural and Factual Background.

The following procedural and factual background is based upon the docket entries in this case along with the factual representations made by the Chapter 7 Trustee during the hearing conducted on April 7, 2020. The Court accepts as uncontested evidentiary proffers the factual representations made by the Chapter 7 Trustee, who is an officer of the Court.

The Debtor filed a Petition for protection under Chapter 7 of the Bankruptcy Code on December 13, 2019. (Docket No. 2, the "Petition.") In the Petition, the Debtor identified the last four digits of her Social Security Number under penalty of perjury. The same day, she filed a "Statement About Your Social Security Numbers" conforming with Official Form No. 121, pursuant to which the Debtor, under penalty of perjury, identified her full Social Security Number.⁴ (Docket No. 3, the "SSN Statement.") The last four digits of her Social Security Number contained on the Petition match the last four digits of her Social Security Number as set forth on the SSN Statement.

The same day she filed the Petition and SSN Statement, the Debtor also filed a Statement of Financial Affairs, Schedules, and all the various other submissions required at the commencement of a bankruptcy case including copies of recent "Statements of Earnings and Deductions" (the "Pay Stubs") from the Debtor's employer. (Docket No. 2.) Unlike many pay stubs, the Debtor's Pay Stubs did not include her Social Security Number.

The initial bankruptcy filings made by the Debtor appear complete in the sense that all the required forms were submitted. According to the Debtor's Schedules, she has almost nothing: just $2,340 of assets (consisting of some household goods, electronics, and clothing) against $17,957 of debts. (Docket No. 3.) In bankruptcy vernacular, it is a "no-asset case." Since the Debtor's nominal assets are entirely exempt under Colorado law, creditors stand to get nothing.

The same day the Debtor filed the Petition, the Clerk of the Court issued a "Notice of Chapter 7 Bankruptcy Case — No Proof of Claim Deadline" conforming with Official Form No. 309A. (Docket No. 1, the "Notice of Bankruptcy Filing.") Section 7 of the Notice of Bankruptcy Filing stated, in relevant part:

Meeting of creditors: January 14, 2020 at 11:00 a.m.

Location: Byron G. Rogers Federal Building

1961 Stout Street, Suite 16-200, Room A

Denver, Colorado 80294

Debtors must attend the meeting to be questioned under oath .... Creditors may attend, but are not required to do so. The meeting may be continued or adjourned to a later date .... Under Bankruptcy Rule 4002(b)(1)-(2), you shall bring the following to the meeting of creditors: (1) picture identification issued by a governmental unit, or other personal identifying information that establishes the debtor's identity AND evidence of a social security number OR a written statement that such documentation does not exist ....

Notice of Bankruptcy Filing § 7.

According to the Chapter 7 Trustee, the Debtor appeared very late for the initial Section 341 Meeting on January 14, 2020. In fact, she was so late that the Chapter 7 Trustee had already concluded all of the many other Chapter 7 Section 341 meetings scheduled that day. The Debtor caught up with the Chapter 7 Trustee only as the Chapter 7 Trustee was leaving the premises. As a result, the Chapter 7 Trustee did not conduct the Debtor's Section 341 Meeting on January 14, 2020 and instead continued the Section 341 Meeting to February 13, 2020 at 11:00 a.m. (Docket Entry on January 16, 2020.)

The Debtor appeared on time for the rescheduled Section 341 Meeting on February 13, 2020. Not surprisingly given the "no-asset" nature of the case, no creditors attended. According to the Chapter 7 Trustee, the Debtor brought her Colorado Driver's License (i.e. , an acceptable form of picture identification issued by a governmental unit) and her most recent Federal income tax return.

But — and this is the rub — the Debtor did not bring her original Social Security Card. She left it at home. She asked to be permitted to provide it later. However, the Chapter 7 Trustee declined. Even though the Debtor was physically present and otherwise ready to proceed with the Section 341 Meeting, the Chapter 7 Trustee chose not to proceed. He did not conduct the Debtor's Section 341 Meeting at all. According to the Debtor, the Chapter 7 Trustee advised that there was nothing the Chapter 7 Trustee could do except seek dismissal.

Consistent with the foregoing, about a week later, on February 21, 2020, the Chapter 7 Trustee filed the Motion to Dismiss. The Motion to Dismiss did not refer to any statutory or other legal basis for dismissal. Instead, the entire sum and substance of the Motion to Dismiss was the following text:

1. A Voluntary Petition for Relief under Chapter 7 of Title 11 of the United States Code was filed on December 13, 2020.

2. The Court issued its Order for the meeting of creditors to be held on January 14, 2020 at 11:00 a.m. The Debtor did not appear at that time. The 341 Meeting was continued to February 13, 2020 at 11:00 a.m. and the Debtor did appear at the continued meeting but failed to provide proof of his social security number at the meeting.

3. The deadline to object to discharge or to challenge whether certain debts are dischargeable is March 16, 2020. Trustee requests a thirty (30) day extension to and including April 15, 2020 for this deadline.

4. The Trustee asserts that such dismissal is in the best interests of all creditors.

WHEREFORE, the Trustee respectfully requests that this Court enter an Order in the form attached hereto dismissing the Voluntary Petition, without prejudice and extending the deadline to object to discharge by an additional thirty (30) days and for such other and further relief as to this Court may seem just and proper.

Motion to Dismiss ¶¶ 1-4. The Chapter 7 Trustee mailed the Motion to Dismiss to the Debtor. (Docket No. 17.)

The Debtor objected to the Motion to Dismiss on February 24, 2020. (Docket No. 18, the "Objection.") As a pro se party without access to electronic filing, the Debtor hand-delivered and filed the Objection. (Docket No. 18.) Given the three days typically assumed for mail service, it appears that the Debtor must have responded and filed the Objection on the very day she received the Motion to Dismiss. As part of her Objection, the Debtor attached a copy of her Social Security Card. In her Objection, the Debtor stated:

I actually attended the meeting with my trustee. But I was unaware of the fact I had to bring in my SSI card. I had left it at home. So I trid [sic] to send it to her in my email when I left.

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