Hari Simran Kaur Khalsa

UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re:
HARI SIMRAN KAUR KHALSA, 	No. 03-19432 TA
Debtor.
MEMORANDUM OPINION
This matter is before the Court on the Debtor’s Motion to Reconsider, filed April
14, 2014, doc. 19 (the “Motion to Reconsider”). The Motion to Reconsider relates to the
Debtor’s Motion to Reopen Case, filed March 13, 2014, doc. 12 (the “Motion to
Reopen”), and the Court’s order denying the Motion to Reopen, entered March 14, 2014.
For the reasons set forth below, the Motion to Reconsider will be denied.
I. 	BACKGROUND
The Debtor filed this Chapter 7 case on December 17, 2003 as a no-asset case.
She was represented by counsel. 	On January 23, 2004, the Chapter 7 trustee issued a
report of no distribution and notice of abandonment. The Court entered a discharge order
on March 17, 2004. A final decree was entered March 29, 2004, and the case was closed.
The Debtor’s bankruptcy schedules listed one secured creditor (Del Norte Credit
Union, with a lien on a pick-up truck), one priority creditor (the Internal Revenue
Service), and 13 general unsecured creditors. 	Total debts were listed at $78,726.45.
None of the debts was shown as disputed. The Debtor submitted a signed declaration that
her bankruptcy schedules were true and correct to the best of her knowledge and belief,
under penalty of perjury.
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Ten years later, on March 13, 2014, the Debtor filed the Motion to Reopen. In it
she stated “I reopen case to take out all creditors. . . .” 	Motion to Reopen, p. 1. 	In the
Motion to Reconsider the Debtor states:
In fact, every creditor in my case is false. . . . . I did not seek to include
these creditors; they were added by my sister Laurie Hope Weir, without
my permission. 	My Motion seeks to withdraw all creditors and to NOT
add any new ones. I, in fact, seek to personally pay back all creditors, and
end the bankruptcy entirely, just to have a normal credit report and score.
Motion to Reconsider, pp. 1-2.
Elsewhere the Debtor also makes clear that her poor credit is what is motivating
her to seek relief from the Court: 	“The key issue here, is that consumers should not
include creditors for car loans; credit cards; or the IRS, without permanent Damage to
their credit.” Motion to Reconsider, p. 2.
The Debtor also asked the Court to waive the filing fee for the Motion to Reopen.
Motion to Reopen, p. 5. In support of the request the Debtor stated:
My rationale is that I am living in Extended Stay America Hotel in Los
Angeles, without otherwise the means to pay for such a fee. 	I proffer as
an addenda 2 fee waiver packets granted by Santa Monica Superior Court
and San Diego Probate Court, for fees over $400 in each case. Their fee-
waiver packets are identical.
Id. Based on the information provided, the Court granted the fee waiver request.
II. 	DISCUSSION
A. 	Original Basis for Denying the Motion to Reopen.
The Court denied the Motion to Reopen because it understood that the Debtor
wished to add creditors. That understanding clearly was incorrect. As the Debtor makes
very plain in the Motion to Reconsider, her intent is just the opposite—to remove all of
her creditors from her bankruptcy schedules, so her case would be left with no creditors
whatsoever.
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B. 	A Debtor Must List All Creditors.
When filing for relief under the United States Bankruptcy Code, a debtor must list
all creditors. 11 U.S.C. § 521(a)(1) and Bankruptcy Rule 1007(a). See also In re Maya
Const. Co., 78 F.3d 1395, 1399 (9th Cir. 1996) (“A debtor must list a creditor whose
identity and claim he knows.”). The purpose of this statute is to give notice to anybody
who may have a claim against the debtor. “The debtor is not permitted to omit creditors
from the list because the debtor does not want those creditors affected by the bankruptcy
case or does not want them to know about the case or for any other reason.” 4 Collier on
Bankruptcy ¶ 521.03[1] (Alan N. Resnick & Henry J. Sommer, 16th ed.). 	To permit a
debtor to select which parties are creditors and which are not would be contrary to one of
the fundamental principles of bankruptcy: treating creditors equally. 	See Howard
Delivery Serv., Inc. v. Zurich Am. Ins. Co., 547 U.S. 651, 655 (2006) (“[T]he Bankruptcy
Code aims, in the main, to secure equal distribution among creditors . . . [P]referential
treatment of a class of creditors is in order only when clearly authorized by Congress.”).
Although the Debtor argues that all of the creditors listed on her schedules are
“false,” Motion to Reopen, p. 1, the evidence is otherwise. 	For example, the Debtor
entered a reaffirmation agreement with Del Norte Credit Union (doc. 9), clearly
indicating that the credit union was a creditor. 	Furthermore, while Debtor may dispute
many of the claims she listed in her schedules,1 disputed claims must be listed. 	See 11
U.S.C. § 521(a)(1)(A) (debtor shall file a list of creditors); § 101(10) (creditor is an entity
with a claim against the debtor; and § 101(5) (claims include disputed claims). 	The
1 The Motion to Reopen seems to assert that Bank of America, CitiBank, Espanola
Hospital Emergency Department, MBNA, Monte Del Sol Medical Group, New Mexico
Heart Institute, Raymond Fidaleo MD, Santa Fe Radiology, Sharp Mesa Vista Psychiatric
Hospital, St. Vincent’s Psychiatric Hospital, University Physician’s Associates, and
UNM Health Science all hold disputed claims,
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Debtor has made no showing that she is entitled to the extraordinary relief of deleting all
her creditors listed in 2003.
C. 	Schedules and Amendments Are Signed Under Penalty of Perjury.
Furthermore, the Debtor was required to sign her bankruptcy schedules under
penalty of perjury. 	Bankruptcy Rule 1008 requires that “all petitions, lists, schedules,
statements and amendments thereto shall be verified or contain an unsworn declaration as
provided in 28 U.S.C. § 1746.” 	28 U.S.C. § 1746, in turn, provides that the unsworn
declaration state: “I declare under penalty of perjury that the foregoing is true and
correct.” The Debtor’s bankruptcy schedules were accompanied by her declaration under
penalty of perjury that they were true and correct to the best of her knowledge and
belief.2
Amendments to bankruptcy schedules are subject to the same perjury rules. Rule
1008 Fed. R. Bankr. P. If Debtor were allowed to reopen her bankruptcy case and delete
all of her creditors, she might be exposed to claims that either her original schedules or
her 	amendments 	ran 	afoul 	of 	the 	perjury 	prohibitions, 	with 	potentially 	serious
consequences. The Court should not allow this to happen.
D. 	Debtor’s Proposed Course of Action Would Have No Legal Effect.
In any event, deleting creditors from Schedules D, E, and F at this point would
have no legal effect. 	The creditors were listed in 2004 when the discharge order was
entered, and their claims against the Debtor, to the extent dischargeable, were discharged.
Removing the creditors from the bankruptcy schedules and mailing matrix at this point
would not accomplish anything.
2 Declaration by Debtor for Electronic Filing of Chapter 7 Petition, filed December 17,
2003, doc. 1-1.
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The Debtor apparently wishes to make payment arrangements with creditors post-
discharge. For example, she states that “I am working with the IRS now, regarding this
filing for 2002.” 	Motion to Reconsider, p. 2. 	Elsewhere she says “I, in fact, seek to
personally pay back all creditors, and end the bankruptcy entirely, just to have a normal
credit report and score.” 	Id. 	That all may be true, and the Debtor has the right to
voluntarily repay discharged debts. 	See 11 U.S.C. § 524(f) (“Nothing contained in
subsection (c) or (d) of this section prevents a debtor from voluntarily repaying any
debt.”). Nevertheless, wishing to pay discharged debts is not a valid basis for removing
creditors from the bankruptcy schedules.
E. 	Debtor’s Likely Desire, To Revoke Her Discharge and Dismiss Her Case,
Cannot be Accommodated.
The Court discerns that the Debtor’s goal is to improve her credit by expunging
her bankruptcy case from her credit record. Motion to Reconsider, p. 1. This could only
be achieved, if at all, by revoking the discharge order and dismissing her case. 	The
bankruptcy court presiding over In re Mi Jung Hong, 2014 WL 465562 (Bankr. C.D. Cal.
2014), addressed a similar situation. In Mi Jung Hong, the debtor asked the bankruptcy
court to reopen her bankruptcy case, revoke the discharge, and then dismiss the case. She
wanted these actions taken because “a discharge remaining on her credit report will
continue to have a negative effect on her personal and professional life as a real estate
escrow agent.” 	2014 WL 465562, at 1. 	The court held it did not have the power to
revoke the discharge because the sole section dealing with discharge revocation, §
727(d), grants standing only to case trustees, creditors, and the United States trustee. Id.
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at *2. 3 The court also held that “[t]he equity powers of the bankruptcy court cannot be
used to override specific statutory provisions in the [Bankruptcy] Code.” 	Id. at*3,
quoting In re Markovich, 207 B.R. 909, 913 (9th Cir. BAP 1997). 	See also In re Kirk,
2014 WL 1248040, at *5 (Bankr. D.N.M. 2014) (§ 105(a) equitable powers may not be
used in disregard of unambiguous statutory language).
The Mi Jung Hong court also noted that granting relief would be prejudicial to
creditors, who have been prevented from collecting their debts:
Debtor now wants to “unring the bankruptcy bell,” even though the
Chapter 7 bankruptcy case has been fully administered, the trustee issued a
no distribution report and no claims have been paid, the court entered the
discharge, the creditors were notified of these various events, the creditors
have been restrained from collecting on their claims by the automatic stay
and the discharge injunction for over two years, she would have the
advantage of not being restricted by the Bankruptcy Code in filing a new
bankruptcy case and obtaining a new discharge if this one is vacated, but
she does not make any arrangements to pay her debts, merely stating that
creditors can resume collection after this time. 	The court finds that these
circumstances do not indicate grounds for relief . . . .
2014 WL 465562, at *8. 	See also In re Gomez, 456 B.R. 574, 577 (Bankr. M.D. Fla.
2011) (denies debtor’s motion to revoke Chapter 7 discharge and discusses the permanent
nature of the discharge injunction and the reliance of a debtor’s creditors on such
permanency).
Finally, the court expressed skepticism that the maneuver would have the desired
effect in any event: “there is no credible or objective proof that her bankruptcy discharge
negatively impacts her credit in addition to any negative impact from her filing a
bankruptcy case, which remains of record in any event.” Mi Jung Hong at *8. 4
3 See also In re Newton, 490 B.R. 126, 127 (Bankr. D.D.C. 2013) (same); Markovich, 207
B.R. at 911-12 (same).
4 15 U.S.C. § 1681c, discussed in Section F below, in general allows consumer reporting agencies to report
the filing of cases under Title 11, subject to a time limitation. Thus, the later dismissal of a case likely
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In the case at bar the facts support the requested relief even less than in Mi Jung
Hong. Here, the Debtor’s bankruptcy case was filed more than ten years ago, rather than
(as in Mi Jung Hong) two and a half years ago. Furthermore, in Mi Jung Hong the debtor
was a real estate escrow agent and was able to afford counsel. Here, the debtor is pro se
and is living in an extended stay hotel, with insufficient income or savings to pay a $260
filing fee. The Court, consistent with the holding in Mi Jung Hong, concludes that if the
Debtor’s real goal is to set aside the discharge order and dismiss the case, the relief must
be denied as both beyond the Court’s power to grant and unlikely to provide the desired
relief.
F. 	The Debtor’s Bankruptcy Case Should no Longer Appear on Her Credit
Report.
The Debtor probably has achieved her credit reporting goal in any event. 	15
U.S.C. § 1681c provides in pertinent part:
(a) Information excluded from consumer reports
Except as authorized under subsection (b) of this section, no consumer
reporting agency may make any consumer report containing any of the
following items of information:
(1) Cases under Title 11 or under the Bankruptcy Act, that from
the date of entry of the order for relief or the date of adjudication, as the
case may be, antedate the report by more than 10 years.
. . . .
Subsection (b) allow bankruptcy cases that are more than 10 years old to be reported if
the proposed credit transaction involves more than $150,000 in principal. 	15 U.S.C. §
1681c(b).
would not prevent a consumer reporting agency from reporting that a case had been filed, even if the case
had later been dismissed.
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Under this statute, the Debtor’s bankruptcy case would be reported only if a
potential lender pulled a copy of her credit report in connection with a loan request for
more than $150,000. 	Based on the information the Debtor provided to the Court in
support of her request for a fee waiver, it appears unlikely that the Debtor will be seeking
a loan in excess of $150,000, or that such a loan request would be granted, whether or not
the 2003 bankruptcy case is shown on a credit report.
If the consumer reporting agencies are improperly reporting her 2003 bankruptcy
case, in violation of § 1686c, the Debtor has remedies. 	See, e.g. 15 U.S.C. § 1681i
(Procedure in case of disputed accuracy) and § 1681n (Civil liability for willful
noncompliance).
III. 	CONCLUSION
Debtors generally are relieved to be eligible for a bankruptcy discharge and are
willing to endure whatever adverse effects the case filing and discharge have on their
credit. Here, the Debtor has enjoyed the benefit of the bankruptcy discharge for ten years
but now wishes to “unring the bankruptcy bell.” For the reasons set out above, the Court
concludes it is neither able nor inclined to grant the requested relief.
The Court will enter a separate order consistent with this Memorandum Opinion.
_______________________________________
Hon. David T. Thuma
United States Bankruptcy Judge
Entered: April 21, 2014.
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Copies to:
Hari Simran Kaur Khalsa
P.O. Box 661702
Los Angeles, CA 90066
Yvette J. Gonzales
P.O. Box 1037
Placitas, NM 87043-1037
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