Jason Christopher Bradley

UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF NORTH CAROLINA
RALEIGH DIVISION
IN RE:
JASON CHRISTOPHER BRADLEY
DEBTOR
CASE NO.
06-00959-5-ATS
ORDER DENYING CREDITOR'S MOTION TO DISMISS
The matter before the court is Citizens Bank's motion to dismiss
this case pursuant to 11 U.S.C. § 707(b). A hearing took place in
Raleigh, North Carolina on October 24, 2006.
Jason Christopher Bradley filed a petition for relief under
chapter 7 of the Bankruptcy Code on June 29, 2006. On August 11, 2006,
Citizens filed its motion to dismiss, contending that Mr. Bradley's
bankruptcy filing is an abuse of the Bankruptcy Code. In support of
its motion, Citizens contends that it held a lien on a vehicle owned by
Mr. Bradley, that the lien was erroneously released and the title
returned to Mr. Bradley when substantial sums remained owed on the
debt, and that Mr. Bradley fraudulently sold the vehicle when he knew
SO ORDERED.
SIGNED this 24 day of October, 2006.
________________________________________
A. Thomas Small
United States Bankruptcy Judge
____________________________________________________________
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there was an outstanding balance due and that the title was released
in error.
Mr. Bradley testified that he was having financial difficulties
in 2004 as a result of domestic issues and the loss of a job. He
received several calls from Citizens about the delinquency of his
account, as well as someone claiming to be from a guaranty company
explaining that it would be required to pay for the car if Mr. Bradley
failed to make his payments. Mr. Bradley testified that he was very
candid about his inability to make the payments. Mr. Bradley also
received calls from a towing company about repossessing the car, and
Mr. Bradley testified that he gave the callers the address where the
car was located to assist them with picking up the vehicle. The
vehicle was never repossessed; instead, Mr. Bradley received a letter
dated November 1, 2004, stating that the loan had been paid in full and
that the lien had been released. The title was enclosed, with a
notation that the lien was released.
Mr. Bradley further testified that after receiving the title, he
called his uncle (an attorney) to determine what his rights and
obligations were. Mr. Bradley and his uncle assumed that the guaranty
company that called Mr. Bradley had satisfied the loan, and while Mr.
Bradley still owed the money to someone, he had the title to the
vehicle and could act accordingly. Because the vehicle needed
substantial repairs that he could not afford, Mr. Bradley traded in the
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car for another vehicle. Mr. Bradley had no further contact from
Citizens, the guaranty company, or the towing company until January 23,
2006, when Citizens filed a civil action against Mr. Bradley for money
owed. In response, Mr. Bradley consulted with counsel to learn of his
options, including bankruptcy.
Citizens contends that because Mr. Bradley knew that he still owed
substantial money for the vehicle and that Citizens had contacted him
about his payments and repossessing the vehicle, the transfer of the
vehicle when the title was erroneously released was fraudulent and that
this fraud demonstrates abuse of the Bankruptcy Code. Mr. Bradley
contends that first, there was no fraud, and second, the appropriate
relief for Citizens is through an adversary proceeding to except this
debt from discharge pursuant to 11 U.S.C. § 523(a)(2).
Section 707(b)(3) provides that to determine whether granting
relief would be an abuse of chapter 7, a court is to consider "(A)
whether the debtor filed the petition in bad faith; or (B) [whether]
the totality of the circumstances . . . of the debtor's financial
situation demonstrates abuse." 11 U.S.C. § 707(b)(3).
When Mr. Bradley filed his petition at the end of June 2006,
Citizens was the largest unsecured creditor with a claim in the amount
of $32,080.80. Mr. Bradley also listed additional unsecured debts
totaling $100,500, including credit cards and medical bills. While
Citizens' claim is substantial, there were clearly many other creditors
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that Mr. Bradley could not pay. Bankruptcy was an appropriate solution
for Mr. Bradley, and the court does not find any bad faith or that the
totality of the circumstances demonstrates abuse.
Citizens may have had a basis to object to the dischargeability
of the debt under § 523(a)(2), and Mr. Bradley may have a sufficient
defense to a fraud claim; however, Citizens chose not to pursue that
remedy and the time for filing a complaint to determine the
dischargeability of the debt has passed. This is not a situation that
requires dismissal for abuse, and the motion to dismiss is DENIED.
SO ORDERED.
END OF DOCUMENT
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