Danny Lee Cottrill and Brenda Jean Cottrill

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Order Entered.

Pal Cit

Patrick M. Flatley |
United States Bankruptcy Judge
Dated: Tuesday, June 19, 3007 1L27.37 AM

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

IN RE: )
)
DANNY LEE COTTRILL, and ) Case No. 06-00819
BRENDA JEAN COTTRILL ) Chapter 7
)
Debtors. )
MEMORANDUM OPINION

Danny Lee and Brenda Jean Cotinll (the “Debtors”) filed a motion to waive the requirements of
11 U.S.C. § 524(c)(1) and to approve two untimely made reaffirmation agreements with DaimlerChrysler
Financial Services Americas, LLC (“DaimlerChrysler”). ‘The Debtors’ motion was unopposed, but the
court held a hearing onthe motion on Api 10, 2007, inWheeing, West Virginia. At the hearing, the court
denied the Debtors’ motion to waive § 524(c)(1) on the grounds that the statute is not subject to waiver.
Because the reaffirmation agreements submitted by the Debtors were not made before entry of their
discharge, as required by § 524(c)(1), the court refused to aporove the Debtors’ reaffinmationagreements.
The court further reasoned that it no longer had junsdiction over the issues presented by the Debtors.

Subsequently, the Debtors appealed the court’s determinationto the United States Distict Court
for the Northen District of West Virginia. This memorandum opinion memonializes the court's ruling from
the bench.

I. BACKGROUND

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The Debtors filed their Chapter 7 bankruptcy case on September 12, 2006. At the time of filing,
the Debtors owned two automobiles, a 2005 Dodge Ram Truck and a 2005 Jeep Liberty. The Debtors
financed the purchase of both vehicles with DaimlerChrysler, and it perfected its security interest on the
vehicles’ certificates of title. On Schedule D, the Debtors stated that they owed $20,017.50 on the 2005
Dodge Truck and $13,037.08 on the 2005 Jeep Liberty. On Schedule B, the Debtors represented the
value of the Dodge Truck as $14,100.00 and the Jeep Liberty as $14,225.00.
The Debtors stated their intention to reaffirm the debts on both vehicles when they filed for
bankruptcy on September 12, 2006. On December 6, 2006, DaimlerChrysler filed a Motion to Confirm
Termination of the Automatic Stay as to Personal Property Collateral for Failure to Take Timely Action
on the Debtor’s Statement of Intention. In support of the motion, DaimlerChrysler asserted that the
Debtors did not take timely action to reaffirm the debt within 30 days after the first creditors meeting. The
court granted the motion on December 28, 2006, pursuant to 11 U.S.C. § 362(h).
The Debtors received their Chapter 7 discharge on December 19, 2006. On February 15, 2007,
the Debtors filed a reaffirmation agreement regarding each of their vehicles. As to the 2005 Dodge Truck,
the Debtors seek to reaffirm an obligation of $22,384.00; with respect to the 2005 Jeep Liberty, the
Debtors seek to reaffirm an obligation of $14,406.00.
II. DISCUSSION
The Debtors requested that this court either find that § 524(c) is subject to waiver or that the court
vacate the Debtors’ discharge, approve the reaffirmation agreements, and then re-enter their discharge.
The Debtors further assert that this court has jurisdiction to approve an untimely made reaffirmation
agreement after entry of the Debtors’ discharge. These arguments, however, are without merit.
A. Section 524(c) and Waiver
The Debtors argue that, because they are voluntarily consenting to the reaffirmation agreements,
and because no party objects, they do not need to be protected by the timing requirement of § 524(c)(1).
In effect, the Debtors seek to create two different classes of bankruptcy debtors: those that are able to
understand the financial burden they are placing upon themselves and those that cannot. The latter group,
the Debtors assert, is the group that Congress intended to protect under § 524(c), as they are unable to
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understand the financial consequences of entering a reaffirmation agreement. Contending that they are
members of the former group and fully understand the risks they are assuming in the reaffirmation
agreements, the Debtors state that no good reason exists to bind them to the requirement in § 524(c)(1)
that their reaffirmation agreements be made before the entry of their discharge.
Contrary to the Debtors’ arguments, the timing requirement of § 524(c)(1) is imposed by
“substantive statutory law and not by procedural rule.” In re Collins, 243 B.R. 217, 219 (Bankr. D.
Conn. 2000). The substantive nature of the requirements to enter into a valid reaffirmation agreement is
evidenced by the language of § 524(c) itself. The statute states that a reaffirmation agreement is valid “only
if” all elements of the statute are satisfied. Further, “the statutory requirement cannot be waived or
extended after discharge occurs;” otherwise, the statute would lose its protective intent. Id. at 219-21.
The timing requirement of § 524(c)(1) is mandatory because it is designed “to protect the debtor from his
or her own bad judgment.” Mickens v. Waynesboro Dupont Emples. Credit Union, Inc. (In re
Mickens), 229 B.R. 114, 118 (Bankr. W.D. Va. 1999). See also Arnhold v. Kyrus, 851 F.2d 738, 740-
42 (4th Cir. 1988) (§ 524(c) exists to protect debtor from his own actions); In re Kamps, 217 B.R. 836,
846 (Bankr. C.D. Cal. 1998) (holding that the requirements of § 524(c) were not subject to waiver by a
debtor because “they exist to protect a debtor from the debtor’s own bad judgment, and the debtor cannot
waive them”); In re Catron, 186 B.R. 194, 196 (Bankr. E.D. Va. 1995) (holding that any waiver of the
discharge of a particular debt must strictly follow the procedures prescribed in the Bankruptcy Code and
Bankruptcy Rules, especially § 524(c)); In re Whitmer, 142 B.R. 811, 812-13 (Bankr. S.D. Ohio 1992)
(§ 524(c)(1) requires the reaffirmation agreement be entered into prior to the granting of the discharge as
an additional protection for the debtor).
Congress intentionally worded § 524(c) to protect the debtor from making ill advised decisions
after having its debt discharged. Catron, 186 B.R. at 196. Because § 524(c)(1) is not subject to waiver,
the court refused the Debtors’ request to ignore the plain language of the statute.
B. Vacating the Discharge To Enter Reaffirmation Agreements
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Acknowledging that the court may strictly interpret the timing requirements of § 524(c)(1), the
Debtors request, in the alternative, that this court vacate the Debtors’ discharge, allow the reaffirmation
agreements to be entered, and then re-enter the Debtors’ discharge order.
In the Debtors’ motion, they do not assert any legal basis for the court to vacate their discharge
order. The court granted the Debtors a discharge on December 19, 2006, but the Debtors did not make
their request to vacate their discharge until February 15, 2007. Thus, the only applicable rule of procedure
available to the Debtors is Fed. R. Civ. P. 60(b), as made applicable to this proceeding by Fed. R. Bankr.
P. 9024.
Rule 60(b) provides six grounds where a court may relieve a party of an order:
On motion and upon such terms as are just, the court may relieve a party or a party’s legal
representative from a final judgment, order, or proceeding for the following reasons: (1)
mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which
by due diligence could not have been discovered in time to move for a new trial under Rule
59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation,
or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has
been satisfied, released, or discharged, or a prior judgment upon which it is based has
been reversed or otherwise vacated, or it is no longer equitable that the judgment should
have prospective application; (6) any other reason justifying relief from the operation of the
judgment.
Here, the Debtors do not allege that the discharge order entered by the court should be vacated
on the grounds set for in (2), (3), (4), or (5). Nor have the Debtors asserted any basis for vacating their
discharge under Rule 60(b)(1). See, e.g., Pioneer Inv. Serv. Co. v. Brunswick Assocs. Ltd. P’ship, 507
U.S. 380, 393 (1993) (stating that Rule 60(b) is not intended to provide another opportunity to parties to
file a paper when they mistakenly miss a deadline without good cause); Thompson v. E.I. DuPont de
Nemours & Co., 76 F.3d 530, 533-34 (4th Cir. 1996) (The court will not use its equitable powers to
relieve a party of an order when that party mis-timed its filings with the court).
Thus, the only basis in this case for the Debtors to argue that their discharge order should be
vacated is Rule 60(b)(6), which allows the court to discharge an order for “any other reason justifying relief
from the operation of the judgment.” This Rule, however, will not help the Debtors because this court will
not use Rule 60(b)(6) to allow the filing of two untimely made reaffirmation agreements when the Debtors
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were aware of the timing requirements of § 524(c)(1). See, e.g., In re Wyciskalla, 156 B.R. 579, 580-81
(Bankr. S.D. Ill. 1993) (“[R]elief under 60(b)(6) is warranted only upon a showing of extraordinary
circumstances that create a substantial danger that the underlying judgment was unjust”) (citation omitted).
The court recognizes that contrary authority does exist. In the case of In re Long, 22 B.R. 152,
155 (Bankr. D. Me. 1982), the court held that it could vacate the debtor’s bankruptcy discharge to
approve an otherwise untimely made reaffirmation agreement when no party objected to that procedure.
The court reasoned that as a bankruptcy court, it had the powers of equity; therefore, it could vacate an
order according to Fed. R. Civ. P. 60(b). Id. This court rejects incorporating Long’s application of Fed.
R. Civ. P. 60(b) in this case, on the grounds that, “a movant seeking relief under Rule 60(b)(6) [is required]
to show ‘extraordinary circumstances’ justifying the reopening of a final judgment.” Gonzalez v. Crosby,
545 U.S. 524, 535 (2005). Here, the Debtors missed the deadlines set forth in § 524(c)(1), and without
some extraordinary explanation as to why that deadline was missed, relief under Rule 60(b)(6) is not
appropriate. Moreover, the Bankruptcy Rules expressly provide for a procedure whereby the entry of a
discharge can be delayed at the request of a debtor in the event a debtor is having difficulties executing a
reaffirmationagreement with a creditor. See, e.g., Rigal v. Fleet Mortgage Corp. (In re Rigal), 254 B.R.
145, 148 (Bankr. S.D. Tex. 2000) (holding that Fed. R. Bankr. P. 4004(c)(2) was “specifically written
to allow the Debtor to delay entry of [a] discharge so that a reaffirmation agreement could be considered”).
As an alternative basis to Rule 60(b)(6), the Debtors assert that this court has the equitable power
under 11 U.S.C. § 105(a) to issue any order “necessary or appropriate to carry out the provisions of [the
Bankruptcy Code].” 11 U.S.C. § 105(a). This equitable power, however, cannot be used “to fashion
substantive rights and remedies not contained in the Bankruptcy Code . . . or to negate substantive rights
or remedies that are available.” Omni Mfg. v. Smith (In re Smith), 21 F.3d 660, 665-666 (5th Cir.
1994). See also United States v. Sutton, 786 F.2d 1305, 1308 (5th Cir. 1986) (“[§105(a)] does not
authorize the bankruptcy courts to create substantive rights that are otherwise unavailable under applicable
law, or constitute a roving commission to do equity.”); In re Stewart, 355 B.R. 636, 638-39 (Bankr. N.D.
Ohio 2006) (A bankruptcy court’s equitable powers can only be used within the limits of the Bankruptcy
Code); In re Brinkman, 123 B.R. 611, 612-13 (Bankr. N.D. Ind. 1991) (holding that a discharge order
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may not be revoked for the purpose of entering into and/or validating invalid reaffirmation agreements); In
re Eccleston, 70 B.R. 210, 213 (Bankr. N.D.N.Y. 1986) (the bankruptcy court will not use its equitable
powers to vacate an entry of discharge for the purpose of validating an otherwise invalid reaffirmation
agreement).
Further, § 105(a) simply “does not authorize the court to enter orders which are in conflict with
other provisions of the Code.” In re Minor, 115 B.R. 690, 697 (Bankr. D. Colo. 1990). Section
524(c)(1) states that a reaffirmation agreement will only be enforceable if “such agreement was made
before the granting of the discharge under section 727, 1141, 1228, or 1328 of [title 11].” Entering the
Debtors’ reaffirmation agreements by using this court’s equitable powers under § 105(a) would be in direct
conflict with § 524(c)(1), and, therefore, inappropriate.
C. Subject Matter Jurisdiction to Consider Untimely Reaffirmation Agreements
The Debtors’ legal theory is predicated on the assertion that, even after the court has entered the
Debtors’ discharge order, it maintains jurisdiction to approve entry of untimely made reaffirmation
agreements. This contention also lacks merit. E.g., Gitlitz v. Soc’y Bank (In re Gitlitz), 127 B.R. 397,
401 (Bankr. S.D. Ohio 1991) (“[I]t is not accurate to say that Congress intended, or that the law provides,
for court involvement [in reaffirmation agreements] beyond that authorized in [§ 524(c)]”).
This court does not have jurisdiction over untimely made reaffirmation agreements pursuant to 28
U.S.C. § 1334(b). Under that statute, the “district courts shall have original but not exclusive jurisdiction
of all civil proceedings arising under title 11, or arising in or related to cases under title 11.” 28 U.S.C. §
1334(b). A proceeding is “arising under” title 11, when it involves “a cause of action created or determined
by a statutory provision of title 11.” Wood v. Wood (In Re Wood), 825 F.2d 90, 96-97 (5th Cir. 1987).
“Arising in” title 11 “reference[s] . . . administrative matters that arise only in bankruptcy cases.” Id. at 97.
These are generally matters that would not exist without the bankruptcy. Id. Finally, a proceeding is
“related to” a case under title 11 depending on “ ‘whether the outcome of that proceeding could
conceivably have any effect on the estate being administered in bankruptcy.’ ” Valley Historic Ltd. P’ship
v. Bank of N.Y., No. 06-1571, 2007 U.S. App. LEXIS 11556, at *9 (4th Cir. May 17, 2007); see also
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New Horizon of N.Y. LLC v. Jacobs, 231 F.3d 143, 150-51 (4th Cir. 2000) (quoting Pacor, Inc. v.
Higgins, 743 F.2d 984, 994 (3d Cir. 1984), rev’d on other grounds, 516 U.S. 124 (1995)).
In the Debtors’ case, the untimely reaffirmation agreements that they seek to file do not “arise
under,” “arise in,” and are not “related to” the Debtors’ bankruptcy proceeding. The Debtors’ request
to waive § 524(c)(1) does not “arise under” the Bankruptcy Code because § 524(c)(1) enforces a strict
time requirement for filing reaffirmation agreements. The Debtors did not comply with § 524(c)(1);
therefore, § 524(c) of the Bankruptcy Code is not applicable to this proceeding. Also, no other provision
of the Bankruptcy Code is applicable to the Debtors’ motion to confer “arising under” jurisdiction.
Likewise, the Debtors’ motion does not “arise in” the Bankruptcy Code because the court
previously entered the Debtors’ discharge on December 19, 2006 – the Debtors’ motion has no effect on
the administrationof the case. Finally, the Debtors’ motion is not “related to” the Debtors’ bankruptcy case
because they have already been granted a discharge, and § 524(c)(1) does not allow reaffirmation
agreements to be entered into once a discharge is granted. Consequently, the Debtors’ motion is little more
than a post-discharge attempt to enter a contract prohibited by the discharge injunction.
In an analogous case, In re Reed, 177 B.R. 258, 259-60 (Bankr. W.D. Ohio 1995), the court
found that Congress did not contemplate the involvement of a bankruptcy court in reaffirmation agreements
if the requirements of 11 U.S.C. § 524(c) were not met. Once the order of discharge is entered, the §
524(c) deadline is passed, and the court cannot enter the agreement. Id. See also Whitmer, 142 B.R.
at 814 (Reaffirmation agreements entered into after the order to discharge are unenforceable and the
bankruptcy court does not have the jurisdiction to address the matter); In re McQuality, 5 B.R. 302
(Bankr. S.D. Ohio 1980) (Once the debtors are discharged from bankruptcy, the court loses jurisdiction
to reopen debtor’s case to approve a reaffirmation agreement). For the aforementioned reasons, this
court’s jurisdiction over the Debtors’ post-discharge attempt to execute reaffirmation agreements
terminated when the court entered their order of discharge.
III. CONCLUSION
For the above-stated reasons, the court denied the Debtors’ Motion to Waive 11 U.S.C. §
524(c)(1) and for Approval of Reaffirmation Agreement.
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