4 ABR 439
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF ALASKA
| In re
KAREN SUE MARSH, Debtor(s) |
Case No. A96-00191-HAR Chapter 7 ORDER DENYING EX PARTE MOTION TO PERMIT FILING OF COMPLAINT OBJECTING TO DISCHARGEABILITY |
The debtor in this case reaffirmed a debt with Alaska USA Federal Credit Union. It was secured by a small boat. At the recent reaffirmation hearing, set under 11 USC § 524(d) since debtor is pro se, she rescinded the reaffirmation because the boat had been stolen after she entered the reaffirmation agreement.
Alaska USA now seeks to file a dischargeability action under one of the fraud grounds mentioned in 11 USC § 523(c). More than 60 days has passed since the first date set for the meeting of creditors under § 341(a). The time for filing a dischargeability complaint under FRBP 4007(c) has expired.
Alaska USA argues that it is unfair to allow the debtor to rescind the reaffirmation agreement, and not allow Alaska USA to file a dischargeability action. If that is so, it is a matter which this court has no control over. The 9th Circuit and most other circuits interpret the time limit for filing dischargeability actions very strictly. In re Hill, 811 F2d 484, 486 (9th Cir. 1987).
If the credit union was concerned about dischargeability, it could have entered into an agreement with the debtor providing for nondischargeability in settlement of a § 523(c) dischargeability matter. In that case, a reaffirmation hearing would probably not even have been required. In re Martinelli, 96 BR 1011, 1014 (9th Cir. BAP 1989). Martinelli was criticized in In re Minor, 115 BR 690, 695 (D Colo 1990).
Alaska USA cites In re Artis, 27 BR 863 (Bankr EDNY 1983) to support
its position that the equities favor allowing it to file a late
dischargeability complaint. This case does not support Alaska USA's
argument that when a debtor rescinds reaffirmation a creditor should be
entitled to file a dischargeability action without regard to the passage
4 ABR 440
of the bar date. It does not even discuss dischargeability.
11 USC § 524(c)(2)(B) provides that a reaffirmation agreement is subject to rescission within 60 days after reaffirmation or the date the court approves the agreement, whichever is later. The risk of recission is one that every creditor entering into a reaffirmation agreement undertakes. Therefore,
IT IS ORDERED that Alaska USA's ex parte motion for filing a late dischargeability complaint is DENIED.