In re Napier-Lopez

• Decision Date: 04 May 2023
• Docket Number: 23-10694-ABA
• Parties: In Re: Rosalyn Napier-Lopez Debtor.
• Court: U.S. Bankruptcy Court — District of New Jersey

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In Re: Rosalyn Napier-Lopez Debtor.

No. 23-10694-ABA

United States Bankruptcy Court, D. New Jersey

May 4, 2023

NOT FOR PUBLICATION

Chapter 13

MEMORANDUM DECISION

Andrew B. Altenburg, Jr. United States Bankruptcy Judge

I. INTRODUCTION

This matter comes before the court by the motion of Isabel Balboa the standing Chapter 13 trustee ("Standing Trustee"), joined by Roberts Mill Apartments, the lessor and a creditor of the debtor, Roslyn Napier-Lopez, requesting an order dismissing Ms. Napier-Lopez's current case for not having been filed in good faith and imposing a 180-day bar (the "Dismissal Motion"). After a plenary hearing, at which time all the parties appeared and Ms. Napier-Lopez testified, and based upon the entire record, including the history of Ms. Napier-Lopez's multiple bankruptcy cases, her threadbare petition and woefully deficient schedules and inadequate disclosures in this case, and lack of credibility, the court grants the Standing Trustee's motion.

II. JURISDICTION AND VENUE

This matter before the court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (O), and the court has jurisdiction pursuant to 28 U.S.C. § 1334, 28 U.S.C. § 157(a) and the Standing Order of Reference issued by the United States District Court for the District of New Jersey on July 23, 1984, as amended on September 18, 2012, referring all bankruptcy cases to the bankruptcy court. The record is closed. The following constitutes the court's findings of fact and conclusions of law as required by Federal Rule of Bankruptcy Procedure 7052.

III. NECESSARY BACKGROUND AND CASE HISTORY

At the outset, the court mentions that throughout all of her cases before the court, it has become familiar with Ms. Napier-Lopez. It has had numerous opportunities to observe her in person and over the telephone. The court has examined her, questioned her, listened to her, observed her demeanor and interactions, and has had ample opportunity to judge her credibility. The court has reviewed its dockets to confirm its understanding. The court does not make its findings blindly or its discussion casually.

A. Overview and Purpose of a Chapter 13 Case

To start with, "[t]he principal purpose of the Bankruptcy Code is to grant a 'fresh start' to the 'honest but unfortunate debtor.'" Marrama v. Citizens Bank, 549 U.S. 365, 367 (2007) (quoting Grogan v. Garner, 498 U.S. 279, 286, 287 (1991)). Indeed,

Limiting relief to the "honest but unfortunate debtor" is so enshrined in the Bankruptcy Code that Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") when a perceived increase in serial and abusive filings seemingly threatened that foundation. . . . In sum, Congress made manifest its intent to curtail abusive filings and limit bankruptcy relief to the "honest but unfortunate debtor."

In re Reppert, 643 B.R. 828, 840 (Bankr. W.D. Pa. 2022). "Inherent in the concept of the 'honest debtor' are the attributes of '[g]ood faith and candor,' which 'are necessary prerequisites' to any bankruptcy filing." In re Campbell, 634 B.R. 647, 653 (Bankr. D.D.C. 2021) (emphasis added) (quoting In re Zick, 931 F.2d 1124, 1129-30 (6th Cir. 1991)).

To that end, filing a bankruptcy petition is a significant endeavor, as a bankruptcy case is a serious proceeding that has pronounced legal effects on debtors and creditors alike. By filing a bankruptcy petition and seeking safe harbor among the provisions of the Bankruptcy Code, a debtor gains access to a number of powerful protections unavailable outside of bankruptcy. Chief among these protections is the automatic stay. See 11 U.S.C. § 362(a). The moment a case is filed, the automatic stay leaps into effect by operation of law and provides fundamental protection to debtors from actions to collect on prepetition debt. Id.; Chapter 13 - Bankruptcy Basics, U.S. COURTS, https://www.uscourts.gov/services-forms/bankruptcy/bankruptcy-basics/chapter-13-bankruptcy-basics (last visited May 1, 2023); see also 11 U.S.C. § 362(a)(1), (6). "The filing of the bankruptcy case acts to give debtors, including debtors in chapter 13 cases, a breathing spell from creditors. . . . By halting litigation against the debtor, the [automatic] stay gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy.'" In re Morrow, 495 B.R. 378, 386 (Bankr. N.D.Ill. 2013) (quoting Kimbrell v. Brown, 651 F.3d 752, 755 (7th Cir. 2011) (citing H.R. Rep. No. 95-595, at 340 (1978), reprinted in 1978 U.S.C.CA.N. 5963, 6296-97)) (internal quotation omitted). Likewise, although some exceptions apply, generally "[i]n a Chapter 13 case context, the automatic stay permits the Debtor (lessee) to attempt reorganization, and to assume the lease and cure the default[.]" In re Lowry, 25 B.R. 52, 56 (Bankr. E.D. Mo. 1982).

A Chapter 13 bankruptcy case allows individuals with regular income to pay off their debts-in whole, or as is more often the case, in part-over the course of three to five years. 11 U.S.C. §§ 109(e), 1322. Debtors may save their homes by staying foreclosure or eviction proceedings and curing their arrears over the life of their plan. 11 U.S.C. § 1322(b)(3); see generally Chapter 13 - Bankruptcy Basics, cited supra; 8 Collier on Bankruptcy, ¶ 1300.01 (Matthew Bender 2023). But, only the debtor may propose a Chapter 13 plan, 11 U.S.C. § 1321, and so long as their plan meets the statutory requirements for confirmation set forth in 1322(a), the Code affords debtors significant discretion in choosing how to repay their debts, 11 U.S.C. § 1322(b); 8 Collier on Bankruptcy, ¶ 1300.01. Debtors may choose whether to reject or accept residential leases, they may cure prepetition defaults through their plan, they may exempt assets from the bankruptcy estate, and they may decide whether to fund their plan using future income or from the sale of assets, or both. 11 U.S.C. §§ 522(b), (d); 1322(b)(3), (7), (8). Upon successfully completing a Chapter 13 plan, a debtor is entitled to a discharge, which, with limited exceptions, releases them from personal liability of all debts allowed or provided for by the plan. 11 U.S.C. § 1328(a); Chapter 13 - Bankruptcy Basics, supra. Indeed, in the hands of the honest but unfortunate debtor, bankruptcy can be a powerful, transformative tool. In the hands of the dishonest debtor, however, bankruptcy can be a tool for abuse and fraud.

Fortunately, the Bankruptcy Code contains safeguards to prevent abuse, and the Chapter 13 trustee plays a key role. In a Chapter 13 case, an impartial case trustee, like the Standing Trustee here, is appointed to administer the case and represent the interests of the bankruptcy estate. 11 U.S.C. § 1302. The trustee is responsible for accounting for property received from the debtor, investigating the debtor's financial affairs, and examining creditors' claims. 11 U.S.C. §§ 704, 1302(b)(1); see also 8 Collier on Bankruptcy, ¶ 1302.03 (describing the duties of the Chapter 13 trustee). Section 521(a)(3) and (4) and Fed.R.Bankr.P. 4002 require debtors to cooperate with and provide documents to a trustee in the performance of their duties. The Chapter 13 trustee also holds a meeting of creditors, at which the trustee places the debtor under oath and both the trustee and creditors may ask the debtor questions. 11 U.S.C. § 341(a). In addition to being required to provide documents for this meeting, the debtor is required to attend this meeting, and must, under oath, answer questions. 11 U.S.C. § 343; Fed.R.Bankr.P. 4002. This meeting is a crucial part of the bankruptcy process, as it allows the parties involved to gain a clear understanding of the debtor's financial affairs. This information may be used, for example, to determine whether there are grounds for dismissal of the case, whether a reorganization is feasible, or whether all of the debtor's assets are accurately reflected in the debtor's schedules. See, e.g., In re Lopez, 532 B.R. 140, 146 (Bankr. C.D. Cal. 2015); In re Johnson, 291 B.R. 462, 468 (Bankr. D. Minn. 2003); In re Vilt, 56 B.R. 723, 725 (Bankr. N.D.Ill. 1986).

While the Bankruptcy Code provides significant protections and rights to a debtor, in exchange for those protections and rights, it also imposes duties and responsibilities on a debtor. These duties and responsibilities serve as further safeguards to prevent abuse. See generally 11 U.S.C § 521. Without question, the necessary prerequisites of good faith and candor, Zick, 931 F.2d at 1129-30, are interwoven into the duties and disclosure requirements placed on debtors by the Bankruptcy Code. Key to the bankruptcy process is the duty of a debtor to file complete and accurate schedules of assets and liabilities, current income and expenditures, executory contracts and unexpired leases, as well as a Statement of Financial Affairs. Id.; Fed.R.Bankr.P. 1007(b)(1); In re Schapiro, No. 96-13357DWS, 1997 WL 367201, at *6 n. 24 (Bankr. E.D. Pa. June 6, 1997) ("A debtor's duty to file complete and accurate schedules, see 11 U.S.C. § 521, is paramount"); In re Green, 141 B.R. 440, 442 (Bankr. M.D. Fla. 1992) (the requirements of § 521(1) are "some of the most important duties of a debtor"; In re Dreyer, 127 B.R. 587, 593 (Bankr. N.D. Tex. 1991) ("The bankruptcy system relies on a debtor to deal honestly with his creditors by making full, complete and honest disclosure in his statements and schedules.") (emphasis added) (citing Hudson v. Wylie, 242 F.2d 435 (9th Cir.), cert. denied, 355 U.S. 828 (1957)). A debtor must also provide the Chapter 13 trustee with a copy of their...