Bankruptcy Court Refuses to Reopen Case for Reaffirmation Agreement

In re Uzcanga-Ramirez, No. 22-31705 (Bankr. D.Or. May 9, 2023)

On May 9, 2023, the U.S. Bankruptcy Court for the District of Oregon entered an opinion, approved by all of the active judges of the district, to accompany an order denying the debtor’s motion to reopen her chapter 7 case. The motion would have been a prelude to the debtor moving to vacate her discharge so that she may enter into a reaffirmation agreement, the details of which are not given.

The court held that it lacked the authority to vacate the debtor’s discharge under the circumstances.  First, one of the statutory predicates for approval of a reaffirmation agreement is that it be made before entry of the discharge under Bankruptcy Code § 524(c). Once a discharge is granted, the court lacks jurisdiction to approve a reaffirmation agreement.

Second, there is a procedure for extending the time for approval of a reaffirmation agreement while also delaying entry of discharge, which was not done here.

The court acknowledged a prior prevailing practice of vacating a discharge under Rule 9024 of the Federal Rules of Bankruptcy Procedure in order to accommodate such a request but stated that this practice has been foreclosed.

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