Refugio Vasquez

• Court: United States Bankruptcy Court, C.D. California
• Decided: January 24, 2020
• Docket: 2:20-bk-10114
• Status: Unknown

Opinion

2 FILED & ENTERED

4 JAN 24 2020

5 C CL enE tR raK l U D. iS st. r B icA t N ofK CR aU liP foT rC nY ia COURT 6 BY p e n n i n g DEPUTY CLERK

7 NOT FOR PUBLICATION 8 UNITED STATES BANKRUPTCY COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 LOS ANGELES DIVISION 11 In re: Case No. 2:20-bk-10114-RK 12 Chapter 7 REFUGIO VASQUEZ, 13

ORDER: (1) DENYING IN PART AND 14 Debtor. GRANTING IN PART DEBTOR’S REQUEST 15 FOR RECONSIDERATION OF ORDER DENYING CHAPTER 7 FILING FEE WAIVER 16 IN DEBTOR’S ANSWER TO ORDER ON INSTALLMENT COURT FEE PAYMENTS; 17 AND (2) REQUIRING DEBTOR TO APPEAR 18 IN COURT ON AUGUST 4, 2020 AT 1:30 P.M. AND SHOW CAUSE WHY THE CASE 19 SHOULD NOT BE DISMISSED FOR 20 FAILURE TO PAY THE FILING FEE IN FULL OR CLOSED WITHOUT DISCHARGE FOR 21 NONPAYMENT OF THE FILING FEE

22 23 TO DEBTOR REFUGIO VASQUEZ, CHAPTER 7 TRUSTEE ELISSA MILLER, PETER 24 C. ANDERSON, UNITED STATES TRUSTEE, ALL CREDITORS AND INTERESTED 25 26 PARTIES: 27 The court has considered the request of Debtor Refugio Vasquez, who is a self- 28 represented party, for reconsideration of the court’s order denying his application for waiver of the Chapter 7 bankruptcy case filing fee and allowing him to pay the filing fee 1 2 in installments, filed and entered on January 7, 2020 (Docket No. 7), which request was 3 stated in his Answer to Order on Installment Court fee payments filed on January 10, 4 2020 (Docket No. 11). In support of his request, Debtor states that he cannot afford to 5 pay the filing fee because his income is only $1,755 in social security benefits, “but with 6 the amount I pay for rent which is $1,500 is not enough since I only have some money 7 8 left that I must spare between food and medications.” Debtor further states that “I am a 9 85 year old man and it is very hard for me to get to places or find a part time job to 10 provide more income.” Debtor supported his request with copies of his apartment lease 11 agreement and of cancelled checks for his rent, utility and medical expenses. 12 13 The court denies the request for reconsideration in part and denies Debtor’s 14 request for a waiver of the Chapter 7 bankruptcy case filing fee because the court does 15 not have authority under Section 1930(f)(1) of the Judicial Code, Title 28, United States 16 Code to grant a waiver for Debtor because under that law, the court may waive the filing 17 fee if the court determines that the debtor has income less than 150 percent of the 18 19 income official poverty line as defined by the Office of Management and Budget, and 20 revised annually in accordance with Section 673(2) of the Omnibus Budget 21 Reconciliation Act of 1981 applicable to his family size. However, the court lacks 22 authority to waive Debtor’s filing fee under this law because his monthly income of 23 $1,755 as shown on Schedule I of his bankruptcy petition exceeds 150 percent of the 24 25 income official poverty line as defined by the Office of Management and Budget, and 26 revised annually in accordance with Section 673(2) of the Omnibus Budget 27 Reconciliation Act of 1981 applicable to his family size. The guideline amount for 28 Debtor’s family size of one in California (one of the 48 contiguous states) for 2020 was 1 2 $1,595 when his bankruptcy petition was filed on January 7, 2020, and his monthly 3 income amount of $1,775 is over the maximum guideline amount of $1,595 for his 4 family size located in California. See Poverty Guidelines, 01/08/2020, U.S. Department 5 of Health and Human Services, https://aspe.hhs.gov/poverty-guidelines (accessed 6 online on January 23, 2020) (the 2020 poverty guideline for a family of one in the 48 7 8 contiguous states, including California, is income of $12,760 for the year, and 150% of 9 that amount is income of $19,140 for the year, divided by 12 yields the amount of 10 income of $1,595 per month as the maximum limit to qualify for a fee waiver). It 11 appears that having to pay the Chapter 7 bankruptcy case filing fee of $335 would be a 12 13 financial hardship for Debtor based on his budget of income and expenses as he has 14 stated in his request, but the court is constrained to follow the law as stated in Section 15 1930(f)(1) of the Judicial Code, Title 28, United States Code, which is an objective 16 income test for waiving the filing fee for financial hardship and does not directly take into 17 consideration expenses that the Debtor has. 18 19 The court grants the request for reconsideration in part and vacates its order 20 requiring Debtor to pay the filing fee in installments within 120 days of the filing of the 21 bankruptcy petition filed and entered on January 7, 2020 (Docket No. 7). Debtor is not 22 required to pay the filing fees in installments by May 6, 2020 as previously ordered. 23 There is case law authority that provides that Debtor’s Chapter 7 bankruptcy 24 25 case need not be immediately dismissed upon the court’s denial of his application for a 26 waiver of the Chapter 7 filing fee under Section 707(a)(2) of the Bankruptcy Code, Title 27 11, United States Code, and Debtor’s failure to pay the filing fee in installments within 28 120 days of the filing of the bankruptcy petition under Federal Rule of Bankruptcy 1 2 Procedure 1006(b)(2). In re Gjerde, 535 B.R. 329 (Bankr. E.D. Cal. 2015). As 3 recognized by the court in the Gjerde case, “[t]he alternative to dismissal is to permit the 4 case to proceed with the filing fee to be unpaid.” 535 B.R. at 333. “This alternative is 5 particularly viable where the debtor otherwise is performing the debtor’s duties and does 6 not appear to be inappropriately exploiting the automatic stay as a form of delay to the 7 8 prejudice of creditors.” In re Gjerde, 535 B.R. at 333, citing, 11 U.S.C. § 707(a)(1). 9 However, according to Federal Rule of Bankruptcy Procedure 4004(c)(1)(G), 10 Debtor may not be granted a discharge until he pays the Chapter 7 filing fee in full or 11 the court grants a waiver, which the court cannot do at this time because Debtor is not 12 13 income qualified under the definition of Section 1930(f)(1) of the Judicial Code, Title 28, 14 United States Code. If Debtor wants a Chapter 7 bankruptcy discharge in this case, he 15 will need to pay the filing fee in full or obtain a waiver as required by Federal Rule of 16 Bankruptcy Procedure 4004(c)(1)(G). As the court in the Gjerde case observed, “If the 17 court takes a ‘wait and see’ approach, it can revisit the waiver question later in the case. 18 19 In this court’s experience, the filing fee eventually is paid.” In re Gjerde, 535 B.R. at 20 334. That is, allowing this Chapter 7 bankruptcy case to proceed before considering the 21 waiver question again provides some additional but limited time for the Debtor to find 22 the money to pay the fee. 23 Despite the denial of Debtor’s fee waiver application, the court will allow Debtor’s 24 25 Chapter 7 bankruptcy case to proceed for a limited time (about six months) without 26 dismissing the case for failure to pay the filing fee because it appears that Debtor is 27 28 4 otherwise performing the duties of a bankruptcy debtor and is not inappropriately 2 || exploiting the automatic stay as a form of delay to the prejudice of creditors. 3 However, if Debtor does not eventually pay the filing fee, the court will have to 4 decide among one of three options: (1) waive the filing fee (but the court can only waive the fee if Debtor is qualified); (2) close the case without entry of discharge; or (3) 7 dismiss the case for failure to pay the filing fee under Section 707(a)(2) of the 8 || Bankruptcy Code, Title 11, United States Code. /n re Gjerde, 535 B.R. at 334. 9 The court sets a further hearing in this case on August 4, 2020 at 1:30 p.m. 10 before the undersigned United States Bankruptcy Judge in Courtroom 1675, Roybal Federal Building, 255 East Temple Street, Los Angeles, California 90012. The court 43 || orders Debtor Refugio Vasquez to appear at this hearing on August 4, 2020 at 1:30 14 and show cause why this case should not be dismissed for failure to pay the 18 Chapter 7 bankruptcy case filing fee under Section 707(a)(2) of the Bankruptcy Code, Title 11, United States Code or this case should not be closed without entry of

18 discharge if he does not pay the Chapter 7 bankruptcy case filing fee. Debtor and any 49 || party in interest may file with the court a written response to this order to show cause on 20 || or before July 31, 2020. 21 IT IS SO ORDERED. Hit 22 23 2 25 Date: January 24, 2020 Robert Kwan 6 United States Bankruptcy Judge 27 28