OPINION
KLEIN, Bankruptcy Judge:
The court “may waive” the chapter 7 case filing fee by virtue of 28 U.S.C. § 1930(f)(1) for individuals whose income is below a designated threshold and who are unable to pay the filing fee in installments. The case law on § 1930(f)(1) applies a “totality-of-circumstanees” approach to the waiver decision, focusing mainly on ability to pay. This case holds that bad bankruptcy conduct may suffice to defeat a fee waiver for an otherwise-eligible debtor. It also draws attention to the role of the discharge suspension mandated by Federal Rule of Bankruptcy Procedure 4004(c)(1)(G) as a fee collection device, in lieu of dismissing the case.
The pro se debtor, a disbarred bankruptcy attorney, was the debtor in four prior chapter 7 cases during the past three years, each of which was dismissed because he did not attend the meeting of creditors. In those cases, he ran up $931 in unpaid bankruptcy filing fees. He did not identify those cases in his petition or in his fee-waiver applications and did not include the $931 in unpaid fees in his schedules. For these reasons, the filing fee will not be waived.
This fee waiver denial, however, does not necessarily deny bankruptcy relief to the debtor (who now seems to be complying with basic bankruptcy duties and has a new incentive to obtain a discharge). Rather, the denial means that a chapter 7 discharge is contingent, by virtue of Federal Rule of Bankruptcy Procedure 4004(c)(1)(G), on payment of the $335 filing fee and all other filing fees accruing during the case.
Facts
Sean Patrick Gjerde requests that the [331]*331$335 chapter 7 filing fee1 be waived pursuant to 28 U.S.C. § 1930(f)(1). The chapter 7 trustee objects to waiver of the fee.2
When he filed the case, Gjerde was a federal prisoner nearing release from a 30-month sentence for mail fraud conspiracy and false statements in mortgage application's.3 He was released during this chapter 7 case.
Gjerde was a bankruptcy attorney who, before his disbarment in 2014,4 had filed eighty-one bankruptcy cases in this judicial district as an attorney representing debtor clients,
Gjerde also filed four chapter 7 cases for himself within the past eight years: No. 12-35578-C-7 (filed 8/27/12); No. 12-40107-C-7 (filed 11/16/12); No. 13-23058-C-7 (filed 3/7/13); No. 13-28881-C-7 (filed 7/1/13). Each case was dismissed because Gjerde skipped the meeting of creditors.
In each of his cases, Gjerde obtained permission to pay filing fees in installments and then failed to complete the payments. His accumulated unpaid installments total $931.5
In this ease, Gjerde did not properly identify his four prior cases in his petition or in his fee waiver application. The petition requires disclosure, under penalty of perjury, of “all prior bankruptcy cases filed within last 8 years,” with location where filed, case number, and date filed. He indicated only one case, with the case number “unknown” and the date of filing left blank. He also put the same misinformation in his fee waiver application, once again under penalty of perjury.
Similarly, Gjerde omitted from his schedules, also executed under penalty of perjury, his $931 debt to the United States for unpaid filing fees in his prior cases.
He has amended his schedules once, incurring an additional filing fee that he also wants waived. His second application repeats the problems that are in his initial application.
This fifth case differs from the four previous cases. Gjerde has filed an adversary proceeding seeking to discharge a student loan debt as an undue hardship. Since a discharge is an essential prerequisite to discharging a student loan, it appears that he may actually perform his duties as debtor in this case.
Jurisdiction
Jurisdiction is founded on 28 U.S.C. § 1334(a). Fee waivers under 28 U.S.C. § 1930(f)(1) are core proceedings concerning the administration of the estate. 28 U.S.C. § 157(b)(2)(A).
[332]*332
Discussion
A review of the terms of the statute and the cases construing it set the stage for considering the question whether prior bad bankruptcy conduct warrants denying a chapter 7 fee waiver to an otherwise-eligible individual.
I
The § 1930(f)(1) fee waiver provision gives the court discretion to waive the chapter 7 filing fee for individuals whose income is less than 150 percent of the income official poverty line applicable to a family of the size involved and is unable to pay that fee in installments.6
Under basic textual analysis, a § 1930(f)(1) fee waiver is a matter of discretion. The verb form “court may waive” the filing fee indicates that a waiver is discretionary and not mandatory. 28 U.S.C. § 1930(f)(1) (emphasis supplied); Bishop v. Mann (In re Bishop), 2007 WL 7532285, *3 (9th Cir. BAP 2007) (abuse of discretion standard of review for § 1930(f)(1)).
Congress provided for judicial discretion in § 1930(f)(1), instead of creating a right to a waiver, because a fee waiver is a mixed blessing. It facilitates access to bankruptcy relief for impoverished individuals who might otherwise be too poor to file bankruptcy. But, a fee waiver also impairs the functioning of the bankruptcy system because it deprives the chapter 7 trustees of the $60 from the filing fee that often is their sole source of compensation in a no-asset case, in effect conscripting them to work for free. 11 U.S.C. § 330(b). And, it deprives the courts of fee revenue that Congress counts on to assist in funding the Judicial Branch.
Although the first element of the two-part test (income less 150 percent of the income official poverty line) is objective, the second element (“unable” to pay installment fees) entails subjectivity and discretion.
II
Most of the reported decisions regarding § 1930(f)(1) fee waivers focus on construing inability to pay.
A
The decisions adopt a case-by-case, totality-of-circumstances approach to the exercise of § 1930(f)(1) discretion. E.g., In re Stickney, 370 B.R. 31, 40-42 (Bankr.D.N.H.2007) (collecting cases); In re Spisak, 361 B.R. 408, 413-14 (Bankr.D.Vt.2007).
Courts have considered as relevant whether there are assets or income that might not be property of the estate but that may affect § 1930(f)(1) inability to pay installments. Bishop,
Free access — add to your briefcase to read the full text and ask questions with AI
OPINION
KLEIN, Bankruptcy Judge:
The court “may waive” the chapter 7 case filing fee by virtue of 28 U.S.C. § 1930(f)(1) for individuals whose income is below a designated threshold and who are unable to pay the filing fee in installments. The case law on § 1930(f)(1) applies a “totality-of-circumstanees” approach to the waiver decision, focusing mainly on ability to pay. This case holds that bad bankruptcy conduct may suffice to defeat a fee waiver for an otherwise-eligible debtor. It also draws attention to the role of the discharge suspension mandated by Federal Rule of Bankruptcy Procedure 4004(c)(1)(G) as a fee collection device, in lieu of dismissing the case.
The pro se debtor, a disbarred bankruptcy attorney, was the debtor in four prior chapter 7 cases during the past three years, each of which was dismissed because he did not attend the meeting of creditors. In those cases, he ran up $931 in unpaid bankruptcy filing fees. He did not identify those cases in his petition or in his fee-waiver applications and did not include the $931 in unpaid fees in his schedules. For these reasons, the filing fee will not be waived.
This fee waiver denial, however, does not necessarily deny bankruptcy relief to the debtor (who now seems to be complying with basic bankruptcy duties and has a new incentive to obtain a discharge). Rather, the denial means that a chapter 7 discharge is contingent, by virtue of Federal Rule of Bankruptcy Procedure 4004(c)(1)(G), on payment of the $335 filing fee and all other filing fees accruing during the case.
Facts
Sean Patrick Gjerde requests that the [331]*331$335 chapter 7 filing fee1 be waived pursuant to 28 U.S.C. § 1930(f)(1). The chapter 7 trustee objects to waiver of the fee.2
When he filed the case, Gjerde was a federal prisoner nearing release from a 30-month sentence for mail fraud conspiracy and false statements in mortgage application's.3 He was released during this chapter 7 case.
Gjerde was a bankruptcy attorney who, before his disbarment in 2014,4 had filed eighty-one bankruptcy cases in this judicial district as an attorney representing debtor clients,
Gjerde also filed four chapter 7 cases for himself within the past eight years: No. 12-35578-C-7 (filed 8/27/12); No. 12-40107-C-7 (filed 11/16/12); No. 13-23058-C-7 (filed 3/7/13); No. 13-28881-C-7 (filed 7/1/13). Each case was dismissed because Gjerde skipped the meeting of creditors.
In each of his cases, Gjerde obtained permission to pay filing fees in installments and then failed to complete the payments. His accumulated unpaid installments total $931.5
In this ease, Gjerde did not properly identify his four prior cases in his petition or in his fee waiver application. The petition requires disclosure, under penalty of perjury, of “all prior bankruptcy cases filed within last 8 years,” with location where filed, case number, and date filed. He indicated only one case, with the case number “unknown” and the date of filing left blank. He also put the same misinformation in his fee waiver application, once again under penalty of perjury.
Similarly, Gjerde omitted from his schedules, also executed under penalty of perjury, his $931 debt to the United States for unpaid filing fees in his prior cases.
He has amended his schedules once, incurring an additional filing fee that he also wants waived. His second application repeats the problems that are in his initial application.
This fifth case differs from the four previous cases. Gjerde has filed an adversary proceeding seeking to discharge a student loan debt as an undue hardship. Since a discharge is an essential prerequisite to discharging a student loan, it appears that he may actually perform his duties as debtor in this case.
Jurisdiction
Jurisdiction is founded on 28 U.S.C. § 1334(a). Fee waivers under 28 U.S.C. § 1930(f)(1) are core proceedings concerning the administration of the estate. 28 U.S.C. § 157(b)(2)(A).
[332]*332
Discussion
A review of the terms of the statute and the cases construing it set the stage for considering the question whether prior bad bankruptcy conduct warrants denying a chapter 7 fee waiver to an otherwise-eligible individual.
I
The § 1930(f)(1) fee waiver provision gives the court discretion to waive the chapter 7 filing fee for individuals whose income is less than 150 percent of the income official poverty line applicable to a family of the size involved and is unable to pay that fee in installments.6
Under basic textual analysis, a § 1930(f)(1) fee waiver is a matter of discretion. The verb form “court may waive” the filing fee indicates that a waiver is discretionary and not mandatory. 28 U.S.C. § 1930(f)(1) (emphasis supplied); Bishop v. Mann (In re Bishop), 2007 WL 7532285, *3 (9th Cir. BAP 2007) (abuse of discretion standard of review for § 1930(f)(1)).
Congress provided for judicial discretion in § 1930(f)(1), instead of creating a right to a waiver, because a fee waiver is a mixed blessing. It facilitates access to bankruptcy relief for impoverished individuals who might otherwise be too poor to file bankruptcy. But, a fee waiver also impairs the functioning of the bankruptcy system because it deprives the chapter 7 trustees of the $60 from the filing fee that often is their sole source of compensation in a no-asset case, in effect conscripting them to work for free. 11 U.S.C. § 330(b). And, it deprives the courts of fee revenue that Congress counts on to assist in funding the Judicial Branch.
Although the first element of the two-part test (income less 150 percent of the income official poverty line) is objective, the second element (“unable” to pay installment fees) entails subjectivity and discretion.
II
Most of the reported decisions regarding § 1930(f)(1) fee waivers focus on construing inability to pay.
A
The decisions adopt a case-by-case, totality-of-circumstances approach to the exercise of § 1930(f)(1) discretion. E.g., In re Stickney, 370 B.R. 31, 40-42 (Bankr.D.N.H.2007) (collecting cases); In re Spisak, 361 B.R. 408, 413-14 (Bankr.D.Vt.2007).
Courts have considered as relevant whether there are assets or income that might not be property of the estate but that may affect § 1930(f)(1) inability to pay installments. Bishop, 2007 WL 7532285, at *7; In re Robinson, 2006 WL 3498296, at *3 (Bankr.S.D.Ga.2006).
Likewise, resources of other persons, such as a non-filing spouse or domestic [333]*333partner or persons paying for bankruptcy counsel, are probative of inability to pay. E.g., In re Burr, 344 B.R. 234, 237 (Bankr.W.D.N.Y.2006).
Future financial prospects of the debtor' also matter. Spisak, 361 B.R. at 414.
The common element in these cases is their focus on inherently financial issues.
B
Those decisions agree that the court must be persuaded to waive the filing fees and that the burden of proof (and correlative risk of non-persuasion) is on the applicant for a § 1930(f)(1) fee waiver. Burr, 344 B.R. at 236.
Sometimes persuasion involves close calls. Just as baseball umpires may have different strike zones, differences in outcomes in fee waiver cases may reflect differences in the threshold of doubt of individual judges. Compare In re Machia, 360 B.R. 416, 420-21 (Bankr.D.Vt.2007), with Burr, 344 B.R. at 237.
C
Fee waiver cases involving prior bad bankruptcy behavior are more difficult to find.
As relevant to this case, a district court in a bankruptcy appeal recently noted that a bankruptcy court does not abuse its discretion by denying a § 1930(f)(1) fee waiver on the basis that the debtor owes unpaid filing fees from prior eases. In re Duroser, 2015 WL 4068243, *3 n. 5 (N.D.Ga.2015) (dictum).
III
In assessing a fee waiver, it is appropriate to be mindful of the consequences of a denial of fee waiver.
Contrary to a common assumption, declining to waive the filing fee is not necessarily fatal to bankruptcy relief for the debtor, and nonpayment does not require dismissal of the case.
To be sure, nonpayment of the filing fee constitutes “cause” to dismiss a chapter 7 case and often does lead to dismissal. 11 U.S.C. § 707(a)(2).
Nevertheless, as with § 1930(f)(1), the verb form controlling § 707(a)(2) is permissive — “court may dismiss” — and is not mandatory. It follows that the decision to dismiss entails the exercise of judicial discretion and that the burden of persuasion is on the proponent of § 707(a) dismissal. Hence, the existence of “cause” to dismiss a chapter 7 case does not automatically require dismissal.
The alternative to dismissal is to permit the case to proceed with the filing fee unpaid. This alternative is particularly viable where the debtor otherwise is performing the debtor’s duties and does not appear to be inappropriately exploiting the automatic stay as a form of delay to the prejudice of creditors. See 11 U.S.C. § 707(a)(1).
When a chapter 7 case is permitted to proceed with an unpaid fee, the debtor will not receive a chapter 7 discharge until the filing fee is paid in full, unless the court on further reflection waives the fee. Fed. R. Bankr.P. 4004(c)(1)(G),7
[334]*334This tool enables a variety of alterna-' tives for the court. If the debtor wants a discharge, then the filing fee will have to be paid, unless the court waives the fee later in the case. If the fee is paid, the discharge will issue and the chapter 7 trustee will be paid. If the court takes a “wait and see” approach, it can revisit the waiver question later in the case. In this court’s experience, the filing fee eventually is paid.
In sum, if the fee is not paid, the court retains three options. It can waive the filing fee, thereby removing the obstacle to entry of discharge. It can close the case without entry of discharge. Or, it can dismiss the case under § 707(a).
Rule 1006(b)(2) does not compel a contrary conclusion.- That rule provides that there shall not be more than four installments of the filing fee, that the final installment shall be payable not later 120 days after filing the petition, and that extensions are payable not later than 180 days after filing the petition. Fed. R. Bankr. P. 1006(b)(2).8
This rule does not call for dismissal of a case on account of late installments and does not forbid the payment of late installments even after 180 days.
The immediate consequence for noncompliance with an installment filing fee schedule is that no payment may be made to an attorney or other person who renders . services to the debtor in connection with the case until all installments have been paid. Fed. R. Bankr.P. 1006(b)(3) (“Postponement of Attorney’s Fees”).9 Tardy installments operate to extend the suspension of attorney’s fees. Such a suspension may be an efficacious filing fee collection strategy in a chapter 13 case where the chapter 13 trustee is doling out attorney’s fees as administrative expenses, but it is more difficult to police in cases under other chapters.
The court is left with the main alternatives of dealing with tardy installments by blocking the discharge under Rule 4004(c)(1)(G) or by dismissing the case under § 707(a)(2).
Since either consequence can be averted by paying the filing fee, even after the 180-day deadline for installments, the time' limits specified for installments in Rule 1006(b)(2) seem to be a toothless tiger.10
[335]*335In reality, the leverage to collect filing fees in chapter 7 cases is provided by the Rule 4004(c)(1)(G) bar to entry of the chapter 7 discharge if the filing fee is neither paid nor waived. As the long-term goal of the ordinary chapter 7 individual debtor is entry of discharge, the price of achieving that goal is the $335 filing fee.
IV
Against the backdrop of the option to keep the case open when the filing fee has not been paid, the question becomes whether non-financial factors may warrant denying a fee waiver.
This court accepts for purposes of § 1930(f)(1) analysis that the debtor’s income is less than 150 percent of the income official poverty line applicable to a family size of one and that he is unable to pay the filing fee in installments. Similarly, for purposes of this portion of the analysis, the court takes at face value the debtor’s assertions that his release from federal custody during the case has not improved his finances.
Two obstacles remain for the debt- or’s requests for fee waivers. First, he established a pattern of noncompliance with basic bankruptcy duties during the course of his four previous chapter 7 eases. He did not bother to attend the meeting of creditors required by 11 U.S.C. § 341 in any of those cases. In doing so, he violated the debtor’s duties to cooperate with the trustee as necessary to enable the trustee to perform the trustee’s duties and to attend and submit to examination at times ordered by the court. 11 U.S.C. § 521(a)(3); Fed. R. Bankr.P. 4002(a)(1). Nor did he pay the filing fees in full for any of the four previous cases. The bad bankruptcy conduct in his prior cases constitutes an adequate, independent basis to decline to waive the filing fee. Duroser, 2015 WL 4068243, at *3 n. 5.
Second, in this case, the debtor falsely omitted from his petition correct identification of his four prior eases. He also falsely omitted correct identification of those four prior cases in his applications for fee waivers. And, he falsely omitted from his schedules his debt to the United States for the $931 in unpaid filing fees that remain from those four prior cases. All of these omissions are in documents signed under penalty of perjury. These omissions provide an adequate, independent basis to decline to waive the filing fee.
None of these problems can be chalked off as mistakes by an untutored, self-represented debtor. As noted, when he practiced law, the debtor represented debtors in eighty-one bankruptcy cases in this district. It is implausible that he does not understand the abc’s of preparing schedules and of elementary duties of a debtor in a bankruptcy case.
This constellation of problems warrants exercise of discretion to decline to waive the filing fee under § 1930(f)(1), regardless of whether the debtor’s finances qualify him for the fee waiver.
As noted, if the debtor eventually performs his duties in this case so as to qualify for the chapter 7 discharge, then he will have to pay the $335 filing fee and all related fees.
V
Returning to the question of inability to pay the filing fee, it is not clear that the debtor actually will be unable eventually to pay the $335 filing fee, as well as miscellaneous fees.
[336]*336The gravamen of his argument, on which he has the burden of proof, is that the debtor never again will be able to earn a living because he has been disbarred from practicing law and is saddled with a felony conviction. ' This argument proves too much.
Although it is apparent that the debtor faces self-inflicted obstacles to future success, that does not mean he is unemployable. As a college graduate with a law degree, he still has the intelligence, knowledge, and ability to earn a living.
The court is confident that during the ' time that it takes for the debtor to prosecute his adversary proceeding to discharge a student loan as an undue hardship, he will be able to accumulate the funds to pay the filing fees on which his discharge depends.
An order will be entered denying the debtor’s applications for waiver of filing fees.