Regina Anquionette Spencer

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
REGINA ANQUIONETTE SPENCER,
Debtor.
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Case No. 06-00314
(Chapter 7)
DECISION RE MOTION TO DISMISS
The court will grant the motion of the United States Trustee
seeking dismissal of this case under 11 U.S.C. § 521(i), and the
order of dismissal will permit parties in interest to file
memoranda addressing whether the order of dismissal should make
the dismissal effective on the date of entry of the order of
dismissal or should instead make the dismissal effective
retroactively to the 46 th day after the filing of the debtor’s
petition.
I
Subject to the limited exceptions set forth in §§ 521(i)(3)
and 521(i)(4) that are inapplicable to this case, § 521(i)(1)
provides:
Subject to paragraphs (2) and (4) and notwithstanding
section 707(a), if an individual debtor in a voluntary case
The decision below is signed as a decision of
the court.
Signed: December 22, 2006.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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under chapter 7 or 13 fails to file all of the information
required under subsection (a)(1) within 45 days after the
date of the filing of the petition, the case shall be
automatically dismissed effective on the 46th day after the
date of the filing of the petition.
Section 521(i)(2) (to which § 521(i)(1) is expressly made
subject) provides that “any party in interest may request the
court to enter an order dismissing the case [and] [i]f requested,
the court shall enter an order of dismissal not later than 5 days
after such request.”
II
When the circumstances specified by § 521(i)(1) exist in a
case, § 521(i)(1) makes dismissal automatic notwithstanding 11
U.S.C. § 707(a) which provides that the court “may dismiss a case
under this chapter only after notice and a hearing and only for
cause . . . .” 	Accordingly, for a case to be dismissed pursuant
to § 521(i)(1), there is no necessity for notice and a hearing,
no showing of cause is required, and the court has no discretion
not to dismiss the case. 	It is arguably in this sense that, as
stated by the statute, dismissal is “automatic” effective as of
the 46-day mark of the case. 	Because no hearing is required,
Fed. R. Bankr. P. 2002(a)(4) (requiring 20-day notice of the
hearing on a motion to dismiss a chapter 7 case) similarly is
inapplicable. 	The matter is thus properly before the court.
III
The debtor has not filed a Form B22A (a Statement of Current
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1 	The court does not rely on two of the grounds the motion
advances for dismissing the case. 	First, although the debtor did
not file payment advices as required by § 521(a)(1)(B)(iv), that
requirement applies only if the debtor received payments from an
employer in the 60 days preceding the commencement of the case.
The debtor's Schedule I shows her as being unemployed, and the
United States Trustee does not allege that she received payments
from an employer in the 60-day period. 	Second, contrary to the
United States Trustee's contention, the debtor did comply with 11
U.S.C. § 521(a)(1)(B)(iii)(II) because the petition included as
part of the box for the debtor's signature a certification that
the debtor received and read the notice required by 11 U.S.C. §
342(b), and the debtor signed that certification.
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Monthly Income and Means Test Calculation) as required by 11
U.S.C. § 521(a)(1)(B)(v) within the 45-day period after she filed
her petition commencing this case. 1 	Nor has anyone filed within
the same time period a motion under 11 U.S.C. § 521(i)(3) or (4).
Accordingly, the case has been “automatically dismissed” pursuant
to 11 U.S.C. § 521(i)(1), and the court will thus grant the
United States Trustee’s motion and enter an order of dismissal as
required by § 521(i)(2). 	For reasons discussed below, the
dismissal arguably must be treated as effective only upon the
entry of the order of dismissal even though § 521(i)(1) provides
that the case “shall be automatically dismissed effective on the
46th day after the date of the filing of the petition.”
IV
Regarding the question of the date on which the order of
dismissal should state that the case is dismissed, there are two
possible interpretations of the statute.
A.
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One interpretation is that, when applicable, § 521(i)(1)
effects an automatic dismissal of the case “effective on the 46th
day after the date of the filing of the petition,” and such 46th
day must be treated as the effective date of the dismissal
because that is the plain meaning of the statute. 	Accordingly,
any order issued pursuant to a request under § 521(i)(2) to enter
an order dismissing the case should recite the 46-day mark of the
case as the effective date of the dismissal. 	Many courts,
including this one, have assumed, without extensive analysis,
that the order of dismissal under § 521(i)(2) should dismiss the
case effective as of its 46-day mark.
B.
A second interpretation is that the dismissal of the case is
effective only upon entry of an order dismissing the case. 	Some
arguments in support of that interpretation are as follows.
If the statute were interpreted as requiring the order of
dismissal to direct that the case is dismissed effective as of
the 46-day mark, this would lead to absurd results that Congress
could not have intended, and the statute is sufficiently
ambiguous to permit the alternative interpretation that avoids
those absurd results. 	Upon the 46-day mark of the case, §
521(i)(1) treats the case as “automatically dismissed” in the
sense that, unlike a dismissal under § 707(a), there is no
necessity for showing cause in order to dismiss the case, and,
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2 	However, § 521(a)(1)(B) permits the filing requirements
of that provision to be made inapplicable if “the court orders
otherwise,” and such an order can render § 521(i)(1) inapplicable
to a failure to file information described in § 521(a)(1)(B).
See In re Parker, 351 B.R. 790, 800-02 (Bankr. N.D. Ga. 2006).
3 	Section 521(i)(1) does not refer to § 521(i)(1) as being
subject to paragraph (3) of § 521(i) when plainly it is. 	Perhaps
§ 521(i)(1)’s statement that it is subject to “paragraphs (2) and
(4)” really should have been that it is subject to “paragraphs
(3) and (4).” 	But perhaps it should have been that it is subject
to “paragraphs (2), (3) and (4).” 	Although there plainly was a
scrivener’s error, it is impossible to conclude that making §
521(i)(1) subject to paragraph (2) was a scrivener’s error.
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once the court determines that the debtor has failed by the 45th
day to file information required by 11 U.S.C. § 521(a)(1), there
is, “effective as of the 46th day after the date of the filing of
the petition,” no discretion not to dismiss the case. 2
If the debtor failed by the 45th day to file all information
required by § 521(a)(1), § 521(i)(1) provides that the case is
automatically dismissed at the 46-day mark of the case. 	However,
this provision is expressly made subject to § 521(i)(2), which
provides that “any party in interest may request the court to
enter an order dismissing the case [and] [i]f requested, the
court shall enter an order of dismissal not later than 5 days
after such request.” 3 	As stated in In re Parker, 351 B.R. at 801
(footnote omitted), “[i]f the case had already been
‘automatically dismissed,’ this language would be mere
surplusage.”
Congress did not direct that the court “shall enter an order
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confirming that the case was dismissed effective on the 46th day
after the date of the filing of the petition.” 	If Congress had
intended that the court enter an order confirming that the case
was dismissed on the 46th day, it presumably would have used
language similar to 11 U.S.C. § 362(j) (providing for issuance of
an order “confirming that the automatic stay has been
terminated”).
Interpreting the statute otherwise would lead to absurd
results, and there are many reasons why Congress would have
intended that the order of dismissal should dismiss the case
effective upon the date of entry of the order and not effective
as of the 46-day mark of the case. 	First, there can be
uncertainty whether § 521(i)(1) actually applies. 	If dismissal
is sought because the movant contends that payment advices were
not filed as required by § 521(a)(1)(B)(iv), the debtor might
respond that he received no payments from an employer within the
60 days before the date of the filing of the petition, thereby
giving rise to a factual dispute. 	Obviously the court must first
determine that the debtor received such payments before it can
treat dismissal as automatically required. 	It makes no sense
that the case would stand as already dismissed prior to the
court’s determining that such payments were received.
Second, treating the case as dismissed on the 46-day mark of
the case would give rise to uncertainty in the administration of
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the Federal tax system. 	Under 26 U.S.C. § 6503(h), once the
automatic stay of 11 U.S.C. § 362(a) terminates under 11 U.S.C. §
362(c)(2)(B), the Secretary may have as little as 61 days within
which to make an assessment of taxes (60 days plus whatever
period the Secretary had available to make an assessment at the
commencement of the case). 	A request under § 521(i)(2) for
dismissal of the case may be filed many months after the 46-day
mark of the case. 	See,e.g., In re Cloud, 2006 WL 3438600 (Bankr.
N.D. Okla., Nov. 29, 2006) (request filed 131 days after the 46-
day mark of the case). 	If a case described in § 521(i)(1) is
treated as dismissed at the 46-day mark, even though the order of
dismissal is not entered until more than 61 days after the
passage of the 46-day mark, the Secretary might well lose the
period of time within which the Secretary was allowed to assess a
tax.
Third, the commencement of a bankruptcy case places a
temporary halt (through the automatic stay of 11 U.S.C. § 362(a))
on collection activity and stays the race of diligence in which
creditors often engage in order to prevail in collection efforts
vis-à-vis other creditors. 	If dismissal is effective only upon
entry of an order of dismissal that is noticed to all creditors
simultaneously, this assures that creditors can all
simultaneously resume the race of diligence. 	If, instead,
dismissal is effective at the 46-day mark of the case because of
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non-compliance with § 521(a)(1), the result will be that
creditors will be put to the burden of monitoring the case to
ascertain whether the debtor failed to comply with § 521(a)(1) so
that they can resume collection activity as soon as possible.
Subjecting creditors to that burden could not have been intended
by Congress. 	Making the dismissal effective only upon the date
of entry of the order of dismissal assures that creditors are not
put to that unnecessary burden of monitoring the debtor’s
compliance with § 521(a)(1).
Fourth, in a case in which the debtor’s failure by the 45th
day to file papers required by § 521(a)(1) is not detected until
many months after the case has been pending, various orders may
have been entered in the case. 	If the case is then dismissed
under § 521(i)(2) effective as of the 46-day mark, that dimissal
presents the befuddling question of the effect of that dismissal
on orders entered in the case in the intervening period after the
45-day mark and before entry of the order of dismissal. 	Congress
did not likely intend to wreak such havoc.
Finally, at least one court has held that even after the
case has passed the 45-day mark, the court can order that the
requirements of § 521(a)(1)(B) shall not apply, thus rendering §
521(i)(1) inapplicable. 	See In re Parker, 351 B.R. at 800-02
(court directed under § 521(a)(1)(B) that certain missing
documents were not required to be filed under § 521(a)(1)(B), and
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9	O:\Judge Temp Docs\Spencer (Regina) Decision re Section 521(i) Mtn to Dismissv4.wpd
thereby prevented a dismissal requested by the debtor under §
521(i)(1) that would have worked a substantial injustice on
creditors). 	If that interpretation of the statute is correct, it
serves to illustrate that the case is not actually dismissed
until the order of dismissal is entered. 	Even if that
interpretation is erroneous, it does not alter the other reasons
why the statute ought to be interpreted as making the dismissal
effective only upon the date of entry of the order of dismissal.
V
The court is hesitant to decide the issue of the effective
date of the dismissal without having received the views of the
United States Trustee, who filed the motion, and of other
entities who could be affected by the outcome of that issue. 	An
order follows dismissing the case and reserving for later
determination the question of whether the dismissal is made
effective at the case’s 46-day mark or instead effective as of
the date of entry of the order of dismissal, with interested
parties being given until January 31, 2007, to file memoranda
addressing that question.
[Signed and dated above.]
Copies to: All entities on BNC mailing list; Tax Division,
Department of Justice, Washington, DC 20530; Attorney General for
the District of Columbia.
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