In re Parker, 06-61224.

• Decision Date: 13 September 2006
• Docket Number: No. 06-61224.,06-61224.
• Citation: 351 B.R. 790
• Parties: In re George Alien PARKER, Debtor.
• Court: U.S. Bankruptcy Court — Northern District of Georgia

351 B.R. 790

In re George Alien PARKER, Debtor.

No. 06-61224.

United States Bankruptcy Court, N.D. Georgia, Atlanta Division.

September 13, 2006.

COPYRIGHT MATERIAL OMITTED

Michael R. Berlon, Duluth, GA, for Debtor.

ORDER DENYING DEBTOR'S MOTIONS TO DISMISS

MARY GRACE DIEHL, Bankruptcy Judge.

A primary purpose of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA") which became effective for cases filed after October 17, 2005 was to counteract tie perceived abuse of the Bankruptcy Code by debtors.¹ This case involves the attempt by a Chapter 7 debtor to use the eligibility and automatic dismissal provisions of BAPCPA to abuse the bankruptcy system. The Court will not misconstrue these provisions so as to support Debtor's actions and therefore will DENY Debtor's Motions to Dismiss.

I. STATEMENT OF FACTS

Counsel for George Allen Parker ("Debtor") filed a voluntary Chapter 7 petition on his behalf on Monday, February 6, 2006. The petition designated the case as an "asset" case, indicating that Debtor believed that funds would be available for distribution to his unsecured creditors. He estimated his assets at in excess of one million dollars but less than ten million dollars and he estimated his debts to between 100 and 199 creditors in the same range. The nature of his debts was said to be "Consumer/Non-Business." Debtor also stated "I/we have received approved budget and credit counseling during the 180 day period preceding the filing of this petition." With the bankruptcy petition, Debtor filed his Statement of Financial Affairs, Schedules, Form B22A and List of Creditors. The Schedules filed with the petition showed assets of $1,808,398 and liabilities of $3;970,471.62.

Question 1 on the Statement of Financial Affairs requires a debtor to "State the gross amount of income the debtor has received from employment, trade, or profession, or from operation of the debtor's business, including part-time activities either as an employee or in independent trade or business, from the beginning of this calendar year to the date this case was commenced. State also the gross amounts received during the two years immediately preceding this calendar year." Debtor reported $52,000 for each of 2006, 2005 and 2004.² Debtor reports in response to Question 2 that he had no income other than what is reflected in his Question 1 response. Question 3 requires a debtor to list payments to creditors within the 90 days preceding the filing of the case. The payments listed by Debtor include ten (10) different creditors and total $290,583.49, an amount that is nearly twice Debtor's total reported income for 2004, 2005 and 2006. Question 4 asks about lawsuits within the year preceding the filing of the bankruptcy. Debtor listed 11 such suits. Question 18 a. asks for the names of businesses in which Debtor was an officer, director, partner, or managing executive or was self-employed or had a greater than five per cent ownership interest during the preceding six years. Debtor listed five such businesses: Tri-South Development Corporation, Tri South Development Properties, Inc., Parkstone Properties, Inc., Randall Parker Homes, Inc. and Timeless Architectural Homes, Inc.

Debtor's scheduled assets (Schedule C) include a home in Duluth, Georgia valued at $1,500,000, a 2003 Mercedes Benz SL500 valued at $75,000, a Fantasy Houseboat valued at $180,000, and personal property valued at $48,000. While not listed on his Schedule C, his list of secured creditors includes a number of creditors with liens on specified personalty with the denomination "Surrender." One can only assume that Debtor possessed this property at the time the petition was filed, but failed to disclose it on Schedule C. This other property includes a 2003 Infinity FX 35 ($15,000 value), a blue 2005 Hyundai Tiburon ($16,884), a red 2005 Hyundai Tiburon ($16,884), and a 2004 Mercedes Benz CL 500 ($81,960).

Schedule I (Current Income of Individual Debtor) shows monthly gross income of 54,333.33 and monthly net income of $3,084.60. Debtor's monthly expenses total $45,421.74 on Schedule Debtor's Statement of Intent indicates that he intends to surrender his residence and intends to reaffirm the debts on his Fantasy Houseboat and his 2003 Mercedes Benz SL500. Debtor signed the Statement of Financial Affairs and Schedules under penalty of perjury. Debtor also signed an acknowledgment that he had read and received the "Notice to Individual Consumer Debtor Under Section 342(b) of the Bankruptcy Code," which details the services available from credit counseling agencies, the various chapters of the Bankruptcy Code that are available to individual debtors and an explanation of Bankruptcy Crimes.

The Form B22A filed by Debtor is curious. Form B22A is the Statement of Current Monthly Income and Means Test Calculation which is used to determine whether a Presumption of Abuse arises under 11 U.S.C. § 707(a)(2). Although Debtor checked the box that "Presumption does not arise," the supporting information on the Form would lead to a contrary result. Debtor does not claim the Exclusion for Disabled Veterans of Part I and reports that he is above the median income for his applicable family size. To reach the conclusion that a presumption of abuse does not arise for an above-median income debtor, a calculation must be made in Part V of the form. Debtor entered "0.00" in each of the categories of allowable deductions in Part V but nonetheless concluded that a presumption did not arise. Debtor signed a separate verification under penalty of perjury with respect to the information provided in Form B22B.

Also attached to Debtor's first-day filings was a copy of a business card from Joselyn Torres, a Housing Counselor with "The Impact! Group," and a notation that this is "the counseling company Allen used." The Impact! Group and Joselyn Torres are not listed as approved credit counseling agencies by the Office of the United States Trustee for Region 21.

S. Gregory Hays was appointed as the interim Chapter 7 Trustee for Debtor ("Trustee"). The Section 341(a) meeting of creditors was scheduled for March 13, 2006. On February 10, 2006, Debtor was sent a deficiency notice from the Clerk of the Bankruptcy Court indicating that he had not filed the certificate with respect to pre-petition credit counseling required by 11 U.S.C. § 521(b) and Interim Rule 1007(b)(3), adopted by this Court in its General Order No. 1-2005. It also indicated that Debtor had not filed "(A) Copies of Pay Stubs (or other evidence of payment) Received from Any Employer within the 60 days prior to Filing or alternatively (B) a Statement Signed by Debtor Certifying That within the 60 Days Prior to Filing, Debtor Did Not Receive a Pay Stub from an Employer and Was Either Unemployed or Self-employed" Failure to file this document within 45 days after the filing of the petition will result in the automatic Dismissal of the bankruptcy case unless the Court grants an extension of the time for filing."³

On February 21, 2338, Debtor Filed a Motion to Extend Time for Credit Counseling indicating that, although he had received Counseling, it was not from an approved counselor. Debtor requested additional time to file his certificate. Debtor did not schedule his motion for hearing as required by the Court's rules and procedures, and the Court took no action. The Section 341(a) creditors meeting was rescheduled from March 13, 2006 until April 3, 2006 and again until April 24, 2006 when it was held and concluded. At that meeting, Debtor presented the Chapter 7 Trustee with a certificate showing that he had received the required credit briefing from an approved agency on February 27, 2006.

Prior to the Section 341 meeting, three creditors had filed Motions for Relief from Stay and Debtor, through his counsel, had consented to the relief sought. The Trustee and one creditor (Dale Goodman, the Chapter 7 Trustee for Timeless Architectural Homes, Inc.) had filed Motions for Extensions of Time to Object to Debtor's Discharge. On two different occasions, Debtor consented to the relief sought in those Motions. (Docket No. 36-April 26, 2006 and Docket No. 38-May 1, 2306).

After the 341 meeting, the Chapter 7 Trustee sought Court authority to employ counsel, and the Court approved the employment of Arnall, Golden & Gregory to represent the Trustee. (Docket Nos. 21 and 26). The Trustee then sought to employ a broker to sell the Debtor's "Fantasy Houseboat" on May 30, 2006 (Docket No. 46), and a week later filed a Motion to Approve Compromise and Settlement Between Trustee and Ironstone Bank, the lien holder on the houseboat. (Docket No. 49). Debtor did not object to either action by the Trustee.

On June 15, 2006, a Notice of Appearance was filed by Howard Rothbloom as substitute counsel for Debtor, replacing Michael Berlon, who had filed the bankruptcy petition on behalf of Debtor and who had represented Debtor to this point in the case. On that same date, Mr. Rothbloom filed on behalf of Debtor a Motion to Dismiss Case Pursuant to 11 U.S.C. § 109(h) (Docket No. 55). The following day, a Withdrawal of Docket No. 10, Debtor's Motion To Extend Time for Filing Credit Counseling was filed (Docket No. 56). The Trustee opposed the Motion to Dismiss, and the Court scheduled the matter for hearing. Debtor later filed a Motion to Dismiss Case Under Section 521(i)(2) (Docket No. 58), which was scheduled for hearing at the same time and was opposed by the Trustee. On July 3, 2006, the Trustee filed a Motion to Sell Property seeking to effectuate a sale of the Fantasy Houseboat. (Docket No. 62). No objections to the proposed sale were filed.

A hearing was held on July 25, 2006 on Debtor's Motions to Dismiss (Docket Nos. 55 and 58) and the Trustee's Motion to Sell. In attendance at the hearing were Debtor and his attorney, Howard Rothbloom, the Trustee and his attorney, Neil Gordon, Leroy Culton, the attorney for the ...