Court Applied §105 to Remove Debtor from Joint Chapter 7 Case Since She was Not Eligible for a Discharge Based on Prior Filing with Last 8 Years

Court Applied §105 to Remove Debtor from Joint Chapter 7 Case Since She was Not Eligible for a Discharge Based on Prior Filing with Last 8 Years

Husband and Wife filed a Chapter 7 case in April of 2017. However, Wife had filed a Chapter 7 case within 8 years prior to the 2017 filing and was therefore not eligible to receive a discharge in the new case. The U.S. Trustee (UST)  filed a Motion to Dismiss Wife’s Case.

11 U.S.C. §707 refers to the dismissal of a case; it does not refer to the dismissal of a single debtor in a joint case.

At the hearing on the motion to dismiss, the UST characterized the relief sought as a removal of one debtor, rather than dismissal of a case. The UST relied on a combination of 11 U.S.C. § 105(a) and Wife’s consent as support for the proposition that the Court is authorized to remove one of the two debtors, leaving the other debtor in a chapter 7 case. The UST argued that, in a joint case, the existence of two separate estates, see 11 U.S.C. § 302(b), justifies the dismissal of one debtor. This argument improperly conflates an “estate” with a “case.”

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