In re Clark
Decision Date | 31 October 1994 |
Docket Number | Bankruptcy No. 94-30609-K. |
Citation | 173 BR 142 |
Court | U.S. Bankruptcy Court — Western District of Tennessee |
Parties | In re Juanita Killebrew CLARK, Debtor. |
Allen C. Jones (pro bono), Memphis, TN, for debtor.
Jimmy L. Croom, Staff Atty., U.S. Trustee's Office, Memphis, TN, for U.S. Trustee for Region 8.
MEMORANDUM AND ORDER RE DEBTOR'S "APPLICATION FOR WAIVER OF THE CHAPTER 7 FILING FEE . . ." COMBINED WITH NOTICE OF THE ENTRY THEREOF
In this consumer no-asset chapter 7 case the above-named debtor, Juanita Killebrew Clark ("Ms. Clark"), asserts that she is unable to pay the $160.00 filing fee1 and thus requests a waiver of such fee.
Jurisdiction exists over Ms. Clark and the subject matter herein by virtue of 28 U.S.C. §§ 1334(b) and 157(a) and H.R. 2519, cited as the "Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1994" (Pub.L. No. 103-121; 107 Stat. 1153) (hereinafter "H.R. 2519"). An application filed by an individual debtor for waiver of the chapter 7 filing fee pursuant to the provisions of H.R. 2519 is a core proceeding under 28 U.S.C. § 157(b)(2)(A).
The narrow and ultimate question for judicial determination is whether or not the chapter 7 filing fee should be waived in this case.
Considering the existing case record as a whole, the following shall constitute the court's findings of fact and conclusions of law in accordance with Fed.R.Bankr.P. 7052.
The relevant background facts may be briefly summarized as follows: On October 18, 1994, Ms. Clark filed an original petition under chapter 7 of the Bankruptcy Code accompanied with the instant "Application for Waiver of the Chapter 7 Filing Fee for Individuals Who Cannot Pay the Filing Fee in Full or in Installments." Allen C. Jones, Esquire, of Memphis, Tennessee is providing pro bono representation to Ms. Clark. Mr. Jones is a member of the Memphis Area Legal Services pro bono referral panel for elderly applicants in need. In accordance with the procedural provisions of local Standing Order, Miscell. No. 94-3, a copy of Ms. Clark's application for waiver of the filing fee was transmitted to the United States trustee for Region 8. See also 11 U.S.C. § 307 and Fed.R.Bankr.P. 2002(k).
Ms. Clark has been unemployed since 1940 and does not anticipate gaining employment in the future. She receives on a monthly basis the sum of $606.00 in social security assistance and $10.00 in food stamps. Her aggregate monthly expenses are as follows:
Expenses Amount Rent $173.00 Utilities 125.00 Food 150.00 Clothing 50.00 Transportation 100.00 Recreation 20.00 Charitable contributions 20.00 Life insurance payments 40.00 _______ Total Monthly Expenses $678.00
Ms. Clark's scheduled assets are as follows:
Description Value Checking account $ 60.00 1977 Datsun automobile 200.00 (inoperable) Household goods 1,000.00 Wearing apparel 500.00
Ms. Clark has claimed exemptions in the foregoing personal properties pursuant to TENN.CODE ANN. § 26-2-102.2
The following entities are scheduled by Ms. Clark as being holders of unsecured nonpriority claims against her as of the date of the filing of the chapter 7 petition:
Creditor Claim Gaylors Clinic $1,432.80 Gaylors Clinic 387.22 Western Auto 727.87 Sears Roebuck 1,134.06 Gaylors Clinic 49.89 Visa 1,155.84 Discover Card Services 1,663.72 _________ Total $6,551.40
Section 14(b)(2) of the former Bankruptcy Act, 11 U.S.C. § 32(b)(2), provided that upon the expiration of the time fixed by the court for filing objections to the discharge, "the court shall discharge the bankrupt if no objection has been filed and if the filing fees required to be paid by this Act have been paid in full. . . ." Section 14(c)(8) of the former Bankruptcy Act, 11 U.S.C. § 32(c)(8), similarly provided that the "court shall grant the discharge unless satisfied that the bankrupt . . . has failed to pay the filing fees required to be paid by this Act in full."
In United States v. Kras, 409 U.S. 434, 93 S.Ct. 631, 34 L.Ed.2d 626 (1973), the Supreme Court in a 5-4 decision held, inter alia, that Mr. Kras, an indigent debtor who sought access to the bankruptcy system, had no right to obtain a discharge of debts under the former Bankruptcy Act unless he paid the case filing fee in full. The majority of the Supreme Court found that neither Mr. Kras' due process nor his equal protection rights were unconstitutionally violated by requiring the payment of the filing fee as a condition precedent to the granting of a bankruptcy discharge. Kras, 409 U.S. at 443-47, 93 S.Ct. at 637-39. According to the majority of the Court, a rational basis existed for the filing-fee requirement even for indigent debtors. Id. at 447-48, 93 S.Ct. at 639-40 ( ).
The Bankruptcy Reform Act of 1978 repealed and replaced the former Bankruptcy Act. Pub.L. No. 95-598, 92 Stat. 2549 (1978). Section 246(a) of the Bankruptcy Reform Act ("Bankruptcy Code") created 28 U.S.C. § 1930(a), which requires the payment of the filing fee "notwithstanding section 1915 of this title."3 (emphasis added.) Under the Bankruptcy Code, courts still may not permit indigent debtors to proceed in forma pauperis and obtain a discharge of debts. It appears that 28 U.S.C. § 1930(a) essentially codified the decision of the Supreme Court in United States v. Kras, supra.
It is expressly noted that under the Bankruptcy Code the failure of the debtor to pay the filing fee is no longer a statutory ground to object to the general discharge. See 11 U.S.C. § 727(a). That is, the Congress has repealed section 14(c)(8) of the former Bankruptcy Act, 11 U.S.C. § 32(c)(8), barring discharge for the debtor's failure to pay the filing fee. However, it must be emphasized that there can be a case dismissal under the Bankruptcy Code for the debtor's failure to pay the chapter 7 filing fee. See 11 U.S.C. § 707(a)(2) and Fed.R.Bankr.P. 1017(b).
On October 27, 1993, H.R. 2519 was enacted. Section 111(d) of H.R. 2519 requires the Judicial Conference of the United States to study the effect of waiving filing fees in chapter 7 cases for individual debtors who are unable to pay such fees in installments.
Specifically, section 111(d) of H.R. 2519 provides and requires that:
At its March 1994 meeting the Judicial Conference approved the selection of the following six judicial districts to participate in the statutory pilot program and study in chapter 7 cases of the impact of in forma pauperis in the bankruptcy courts: the Southern District of Illinois, the District of Montana, the Eastern District of New York, the Western District of Pennsylvania, the Western District of Tennessee, and the District of Utah.
Because indigency status warranting in forma pauperis relief under chapter 7 is not statutorily defined, the pilot bankruptcy courts established pursuant to H.R. 2519 must judicially determine on a case-by-case basis whether such relief is appropriate. In proceedings filed by individual chapter 7 debtors under H.R. 2519 seeking in forma pauperis relief, the court will apply a totality of the pre- and postpetition facts and circumstances analysis in determining whether or not to waive the filing fee. Ms. Clark has the burden of proof here and must demonstrate by the preponderance standard that she is unable to pay the filing fee in installments.
Although Ms. Clark, a social security and food stamp recipient, is technically eligible for relief under chapter 13 of...
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