28 Sep Deadline: First Meeting of Creditors Means First Meeting
The time to challenge a debtor’s chapter 7 discharge for abuse is counted from the date of the first meeting of creditors, the Kansas District Court ruled on appeal. SeeIn re Close, Case No. 07-2076-JAR, Bankruptcy case No. 06-20195-7, Turner UST v Close, (2008).
Judge Julie A. Robinson said the U.S. Trustee was too late when it filed a statement of abuse and a motion to dismiss after a continued meeting of creditors, which was weeks after the first meeting of creditors.
First meeting of creditors means first meeting of creditors, Judge Robinson ruled. The Minnesota Bankruptcy Court has since agreed.
The debtors’ discharge in the Close case, which was granted as a matter of course by the Kansas bankruptcy court while the legal dispute over the abuse motion ensued, was allowed to stand.
The Bankruptcy Abuse Prevention and Consumer Protection Act gave the U.S. Trustee the power to contest abusive chapter 7 bankruptcy cases if the debtor fails the means test or for over all circumstances.
Bankruptcy Code Section 704(b) requires the U.S. Trustee challenging a chapter 7 discharge on the ground of abuse to file a statement of abuse within 10 days after the date of the first meeting of creditors and a motion to dismiss for abuse within 30 days after filing the statement.
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