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Dean v. Campbell (In re Campbell) (Case No. 10-60197; A.P. No. 10-06110) 07/05/2011

            The plaintiffs were not scheduled as a creditor in the defendant’s chapter 7 case.  The plaintiffs filed a motion to extend time to file a complaint objecting to the dischargeability of the debt arising from their claim.  The Court granted that motion, and the plaintiffs filed an adversary proceeding under 11 U.S.C. § 523(a)(2), (4), and (6).  The defendant appealed the order granting the motion to extend, and the district court vacated that order on grounds that a complaint brought under 11 U.S.C. § 523(a)(2),(4), and (6) must be filed no more than sixty days after the date first set for the first meeting of creditors. The district court specifically did not rule on whether the complaint, if amended to include a cause of action under 11 U.S.C. § 523(a)(3)(B), would have been timely filed. The district court remanded the matter.

            The plaintiffs amended their complaint to include a cause of action under section 523(a)(3)(B) and on the same date filed a motion to amend the complaint.  The defendant filed an opposition to the motion.  The Court noted that section 523(a)(3)(B) provides that a creditor may file an objection to the discharge of a debt of the kind found in section 523(a)(2), (4) or (6) if the debtor did not schedule the creditor as required by section 521(a) and if the creditor did not have notice or actual knowledge of the case in time to timely file a complaint objecting to the dischargeability of the debt.  The Court concluded that in order for the second sentence of Rule 4007(c) to have meaning, creditors who do not receive notice of the filing of the petition from the debtor must have at least thirty days actual notice of the filing of the petition.

            Finding that the plaintiffs had notice of the bankruptcy case no more than twenty-six days before the deadline to file an adversary complaint under Section 523(a)(2), (a)(4), or (a)(6), the Court granted the motion to amend.

Date: 
Tuesday, July 5, 2011
Category: 
Chapter 7 Issues
Dischargeability
Chapter: 
7