In Re Dipalma

94 B.R. 546, 1988 Bankr. LEXIS 2171, 18 Bankr. Ct. Dec. (CRR) 1011, 1988 WL 139990
CourtUnited States Bankruptcy Court, N.D. Illinois
DecidedDecember 29, 1988
Docket19-04058
StatusPublished
Cited by12 cases

This text of 94 B.R. 546 (In Re Dipalma) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Dipalma, 94 B.R. 546, 1988 Bankr. LEXIS 2171, 18 Bankr. Ct. Dec. (CRR) 1011, 1988 WL 139990 (Ill. 1988).

Opinion

*547 MEMORANDUM OPINION

RONALD S. BARLIANT, Bankruptcy Judge.

The Debtor has moved for reconsideration of an order that effectively extended the bar date for filing objections to discharge and complaints to determine dis-chargeability until December 31, 1988 for certain creditors, including Dr. John Riggs. 1 The Debtor seeks an amended order that would apply the original bar date to Dr. Riggs and thereby prohibit him from filing an objection or complaint. Dr. Riggs contends that the bar date set in the Debt- or’s original chapter 7 case is inapplicable to this reconverted chapter 7 case because the original bar date never expired. The Court will grant the Debtor’s motion and will apply the original bar date to Dr. Riggs.

The facts of the case are relatively straightforward. On July 27, 1987 a joint petition for relief under chapter 7 of the Bankruptcy Code was filed by the Debtor, Vito Dipalma, and his wife Theresa. A Bankruptcy Court order dated August 4, 1987 scheduled the meeting of creditors required by Section 341 of the Code for September 1, 1987. The same order said that October 31, 1987 would be the last day for filing objections to the discharge of the Debtor and the last day for filing complaints to determine the dischargeability of any debt. That date was set in accordance with the Bankruptcy Rules. 2 Dr. Riggs never sought an extension of time for filing an objection or complaint, as he might have under Rules 4004(b) and 4007(c).

On November 8, 1987 (after the October 31 bar date), the Court entered an order, pursuant to Section 706 of the Code, converting the Debtors’ chapter 7 case to one under chapter 13 of the Code. This case proceeded under chapter 13 until August 15, 1988, when Theresa Dipalma was dismissed from the case and Vito Dipalma’s case was reconverted to a chapter 7 liquidation.

In an order dated September 27, 1988 the Court reset the date for the first meeting of creditors for November 1,1988 and reset December 31, 1988 as the bar date for filing objections to discharge and complaints to determine the dischargeability of debts. The Debtor moved the Court to vacate the September 27, 1988 scheduling order as to those creditors who had received timely notice of the first Section 341 meeting and bar date set by the August 4, 1987 order. The Court granted the Debt- or’s motion and entered its October 7, 1988 order. With the Debtor’s consent, that order specifically provided that the new December 31, 1988 bar date apply to Dr. Riggs because counsel for the Debtor mistakenly believed that Dr. Riggs had not received timely notice of the original bar date. The Debtor now claims that Dr. Riggs did receive timely notice of the original bar date and that, indeed, Dr. Riggs was represented at the first Section 341 meeting on September 1, 1987. Dr. Riggs does not contest these assertions. He only denies their relevance to his position that the new bar date applies to his right to file an objection to discharge or complaint to determine the dischargeability of debts. The Debtor has moved this Court to reconsider its October 7, 1988 order and vacate the extended bar date for Dr. Riggs. Discussion:

The issue is whether, in a case originally filed under chapter 7, converted to a *548 case under chapter 13, and reconverted to a case under chapter 7, a creditor who had notice of the first bar date for filing objections to discharge and complaints to determine dischargeability may properly file an objection or a complaint after that bar date has expired. The Debtor claims that Bankruptcy Rule 1019(3) controls the outcome. That Rule (emphasis added) provides:

When a chapter 11 or chapter 13 case has been converted or reconverted to a chapter 7 case:
(3) A new time period for filing claims, a complaint objecting to discharge, or a complaint to obtain a determination of dischargeability of any debt shall commence pursuant to Rules 3002, 4004, or 4007, provided that a new time period shall not commence if a chapter 7 case had been converted to a chapter 11 or 13 case and thereafter reconverted to a chapter 7 case and the time for filing claims, a complaint objecting to discharge, or a complaint to obtain a determination of the dischargeability of any debt, or any extension thereof, expired in the original chapter 7 case.

The Debtor argues that this case falls within the provision of that Rule because his case was originally filed as a chapter 7 case, converted to a chapter 13 case and thereafter reconverted to a chapter 7 case. Since Dr. Riggs had notice of the original October 31, 1987 bar date and since that date passed before the conversion to chapter 13, the Debtor argues, on the basis of Rule 1019(3), that a new time period did not commence upon reconversion to chapter 7 and Dr. Riggs is time-barred from filing an objection or complaint.

Dr. Riggs argues that Rule 1019(3) is inapplicable in this situation because the bar date in the original chapter 7 case did not expire before the case was converted to chapter 13. He first points out that the meeting of creditors held on September 1, 1987 was never concluded because the Debtor announced his intention to voluntarily convert the chapter 7 case to a chapter 13 case, and, second, that the Debtor transmitted his notice to convert the chapter 7 case to a chapter 13 case on October 27, 1987, four days before the original bar date.

The language of Rule 1019(3) is unambiguous. If a chapter 7 case has been converted to a chapter 13 case then reconverted to a chapter 7 liquidation, no new time period will be allowed where the original bar date has expired during the pendency of the original chapter 7 proceeding and the creditors have had a full opportunity to file their claims and complaints. See, In re Gracey, 79 B.R. 597 (Bankr.E.D.Pa.1987); In re Hall, 51 B.R. 326, 329 (Bankr.D.Utah 1985).

Dr. Riggs argues, however, that the October 31, 1987 bar date did not expire in the original chapter 7 case because the Section 341 meeting was not completed on September 1, 1987. Complaints objecting to discharge or to determine the discharge-ability of debts in a chapter 7 case “shall be filed not later than 60 days following the first date set for the meeting of creditors held pursuant to Section 341(a).” Rules 4004(a) and 4007(c) (emphasis added). It is the first date set for the meeting that is determinative; whether or not the meeting is held or completed on that date is irrelevant. See, In re Rhodes, 61 B.R. 626 (9th Cir.B.A.P.1986); Collier on Bankruptcy, 114004.03[1] (15th ed. 1987). Consequently, Dr. Riggs’ argument that expiration of the bar date was somehow tolled because the meeting of creditors was never completed is wrong.

Dr. Riggs next points out that notice of the Debtor’s motion to convert the chapter 7 case to a chapter 13 case was served four days before the original bar date expired. Dr. Riggs argues that there was no purpose to filing a complaint objecting to discharge or to determine dischargeability of a debt in a chapter 7 case after the Debtor sent that notice. 3

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Bluebook (online)
94 B.R. 546, 1988 Bankr. LEXIS 2171, 18 Bankr. Ct. Dec. (CRR) 1011, 1988 WL 139990, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-dipalma-ilnb-1988.