Trustee Blog

Recycled Credit Counseling Certificate Part 3

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In the Recycled Credit Counseling Certificate Chronicles we discussed from the last two days, Judge Houle had a debtor that tried to use an old Certificate of Counseling to file her current case.  The US Trustee brought a motion to have her case  dismissed.  Riverside Bankruptcy Trustee Arturo Cisneros will refer cases to the US Trustee in the Riverside Division with similar facts.

In this case the Judge Dismissed the case with a bar to refiling.

Dismissal with a Bar:

UST argues that Debtor’s bankruptcy case warrants dismissal with at least a 180-day re-filing bar pursuant to §§ 349 and 105(a) because the Debtor evidences no “fresh start” purpose. UST argues that dismissal alone without a re-filing bar is insufficient because it will leave the door open for the Debtor to file again immediately after dismissal. Also, Debtor falsely certified that she obtained credit counseling. The Court finds that UST has presented sufficient evidence to warrant a 180-day re-filing bar.

Under § 349, the Court has the ability to dismiss a case, for cause, with a re- filing bar. 11 U.S.C. §349; see In re Leavitt, 171 F.3d 1219, 1223 (9th Cir. 1999); see also In re Tiner, 2008 Bank. LEXIS 4473 (Bankr. N.D. Cal. 2008) (barring pro se debtors from filing a bankruptcy case for two years because their three recent filings had each failed). Section 349 “gives a court authority to ‘sanction a debtor for cause by imposing a bar against re-filing.’” See In re Mitchell, 357 B.R. 142, 157 (Bankr. C.D. Cal. 2006)(permanently barring debtors from seeking bankruptcy relief). Furthermore, under § 105(a), the Court may issue any order, process or judgment that is necessary or appropriate to carry out the provisions of title 11.

So our Debtor’s case was dismissed  and it was dismissed such that she could not file again for at least 180 days or six months.  The US Trustee prevailed and the debtor will have to wait half a year to refile, maybe next time she will pay for a new certificate.



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