Menu    2 ABR 156 
HERBERT A. ROSS
U.S. Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF ALASKA
605 West 4th Avenue, Room 138, Anchorage, AK 99501-2296 (Phone 907/271-2655)





In re

RYLAND J. STEVENS,

Debtor(s)     

Case No. A-91-00632-HAR
Chapter 7

ORDER DENYING MOTION TO DISMISS
WITHOUT PREJUDICE



     Debtor filed a chapter 7 petition on July 25, 1991. On August 26, 1991, debtor filed a "Motion to Dismiss Chapter 7 Proceeding by Debtor" for a dismissal without prejudice for "cause" pursuant to 11 USC § 707(a). The cause offered by debtor is "that subsequent debts which are dischargeable [have] arisen and debtors wish to retract the chapter 7 filing." The motion gives no indication of what these debts are. After noticing out the motion, debtor lodged an order for dismissal without prejudice and certifies there are no objections to the motion.

I believe this case is controlled by a recent Bankruptcy Appellate Panel decision, In re Leach, ____ B.R. ____, 1991 WL 183932 (9th Cir. BAP, July 23, 1991). The facts of Leach are:

Within the 240 days prior to the filing of the petition, Appellee United States of America Internal Revenue Service, ("the United States") assessed personal federal income taxes against Leach for $39,982.78, making them non-dischargeable TOP    2 ABR 157  pursuant to 11 U.S.C. § 523. On April 16, 1990, Leach filed a motion to voluntarily dismiss his Chapter 7 case. The motion was supported by affidavits which disclosed that 1) Leach had no pressing reason to file for bankruptcy when he did, 2) Leach's original counsel incorrectly advised him that his tax liabilities were nondischargeable, 3) Leach realized only after filing for bankruptcy that the tax liabilities would have been dischargeable had he waited a few months to file his petition, 4) Leach moved to dismiss for the sole purpose of discharging the tax liabilities, and 5) if the motion were granted, Leach would re-file for bankruptcy as soon as the 240-day period had run.

In re Leach at *1.

     The BAP affirmed the Bankruptcy Judge, who denied the motion to dismiss. The BAP said:

     The law in the Ninth Circuit is clear: a voluntary Chapter 7 debtor is entitled to dismissal of his case so long as such dismissal will cause no "legal prejudice" to interested parties. In re International Airport Inn Partnership, 517 F.2d 510, 512 (9th Cir.1975) (cited in Hall, 15 B.R. at 917). • • •

     The instant case is substantially identical to an earlier BAP case, In re Hall, 15 B.R. at 917, wherein the debtors failed to file a homestead declaration until after their Chapter 7 petition had been filed. This allowed the trustee, under California law, to reach the equity in debtors' residence for payment to unsecured creditors. The debtors, who appeared in propria persona, argued excusable neglect and moved to dismiss. The bankruptcy court granted the motion over the objections of the bankruptcy trustee. The BAP reversed, holding that the dismissal was an abuse of discretion, causing "plain legal prejudice" to the unsecured creditors. The BAP reasoned that after dismissal, the debtors could file a homestead, refile for bankruptcy, and thereby avoid any distribution to unsecured creditors. Id. This case can be disposed of based on Hall without any further discussion. [footnotes omitted]

TOP    2 ABR 158 

In re Leach at *1-2.

Footnote 5 to Leach indicates:

     "While a debtor may voluntarily choose to place himself in bankruptcy, he does not enjoy the same discretion to withdraw his case once it has been commenced." In re Klein, 39 B.R. 530, 532 (Bankr.E.D.N.Y.1984) (citing In re Blackmon, 3 B.R. 167 (Bankr.S.D. Ohio 1980)). Dismissal may only occur after a hearing on notice and only for cause. 11 U.S.C. s 707(a); Bankruptcy Rule 1017(a). Although the phrase "for cause" is illustrated by nonexhaustive examples in the Code, it is not defined. Hall at 916.

     The motion gives no indication what nondischargeable debts have accrued in the month between the filing of the petition and the motion. If they are IRS related, the IRS should have been given better notice and more facts. Based on the skimpy information in the motion, it should be denied without prejudice. Therefore,

     IT IS ORDERED that debtor's motion to dismiss is DENIED WITHOUT PREJUDICE. Debtor shall forthwith file his schedules, statements, and lists required by the Bankruptcy Code and Rules.



DATED: October 1, 1991. 
 BY ORDER OF THE COURT
 ______________________________
 HERBERT A. ROSS
 U.S. Bankruptcy Judge


Serve: 
Chris Johansen, Esq. for Debtor 
William Barstow, 3d, Trustee 
IRS Attorneys 
United States Trustee 
Jamilia George, Chief Deputy ClerkH3714