Even if You Are in Prison – File Required Bankruptcy Documents or Your Case Will Be Dismissed.

In prison? If You Are Going to File Bankruptcy, You Must Follow the Rules – No Exception.

In re Harrell, BAP No. EC-20-1091-BTL (9th Cir BAP, 3-20-21) Harrell is incarcerated at Folsom State Prison in California. He filed a “skeletal” chapter 7 bankruptcy case on March 2, 2020. Later that day, the clerk issued a Notice of Incomplete Filing (“Notice”), instructing Harrell to file by March 9 a Statement of SSN (Form 121) and Verification and Master Address List, and to file by March 16 the Statement of Monthly Income, Schedules A-J, Statement of Financial Affairs, and Summary of Assets and Liabilities. The Notice stated that if two filing dates were shown, each date must be timely satisfied as to the documents governed by that date.

On March 10, Harrell filed all of the documents listed in the Notice, with the exception of the Verification and Master Address List, which was due March 9. On March 11, Harrell requested, and the bankruptcy court granted, an extension of time to file missing documents. Harrell was given until March 30 to file them.

On March 26, Harrell filed a “Request for Assistance Giving Notice to Creditors.” Harrell stated that he was unable to provide notice of his case to creditors, because he filed his only copy of his bankruptcy documents on March 10 and Folsom was on lockdown due to the COVID-19 pandemic. On March 31, the clerk issued an Order Dismissing Case for Failure to Timely File Documents, stating that the case was dismissed for failure to comply with the Notice.

The Appellate Court affirmed the bankruptcy court’s decision, which means Mr. Harrell’s case stays dismissed. But stated “Harrell is free to file another chapter 7 case if he so chooses.”

MUSINGS BY DIANE:

To follow the rules, first you must know the rules.

Bankruptcy is not a game. If you file bankruptcy you must follow the rules, even if you are in prison. This debtor wanted the Bankruptcy Court to help him file his list of creditors (a requirement to stay in bankruptcy). The Court said “ah, no. That is your responsibility, not the court’s”.

I understand that people want to make their lives better and filing for bankruptcy protection may be one of those options. But, if you are going to jump off the bankruptcy cliff, no one is there to catch you. It is possible you will find hungry sharks in the dark waters below. It is possible you will be forced to give up assets that are not exempt. Understand that your family may be sued in order to take back the monies you paid them while you were not paying other debts. These are just a few of the nightmares that could be waiting for you if you file bankruptcy without understanding the rules.

Mr. Harrell does not know it, but now he has a bankruptcy on his credit, despite the bankruptcy being dismissed. Yes, he can file another bankruptcy, but then he will have two bankruptcies on his credit. Oh, another surprise – there are rules about filing multiple bankruptcies.

Finances are confusing and everyone needs to take time to determine the best way to find a solution that works in the long run, not just today. Never rely on the Internet for advice – there is more bad advice than good. Always seek advice from at least two people who are experienced in the area you need help. Once armed with good information, then use your common sense to decide what is best for you.