In re Ross

Marrama permits relief that’s not explicitly prohibited by the Code, even if policies shown in the statute suggest otherwise.

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Case Type:
Consumer
Case Status:
Reversed and Remanded
Citation:
No. 15-2222 (In re Ross, 2017 U.S. App. LEXIS 10236 (3d Cir. Pa. June 8, 2017) (3rd Circuit, Jun 06,2017) Not Published
Tag(s):
Ruling:
A bankruptcy court has the general authority to impose a filing injunction after a chapter 13 debtor moves for voluntary dismissal under 11 U.S.C.S. § 1307(b). However, the injunction imposed against the debtor in this case was an abuse of discretion because it barred the debtor from making any bankruptcy filings anywhere for the indefinite future absent the bankruptcy court's express permission, which, among other things, was harsher than the 180-day restriction imposed on bad faith debtors under 11 U.S.C.S. § 109(g).
Procedural context:
On Appeal from the United States District Court for the Eastern District of Pennsylvania
Facts:
Appellant Raymond Ross and his wife Sandra lived in their home in Ambler, Pennsylvania, since 1993. In 2003, the Rosses took on a mortgage from Appellee AmeriChoice Federal Credit Union. The Rosses fell behind on their payments, and in 2012 AmeriChoice filed a foreclosure action in Pennsylvania state court. The state court entered default judgment against the Rosses, and AmeriChoice scheduled a sheriff's sale to be held on October 30, 2013. The day before the sheriff's sale, Raymond1 —acting alone, without Sandra—filed the first of the Rosses' three relevant Chapter 13 bankruptcy petitions. Raymond's first petition triggered Chapter 13's automatic stay and put a halt to the sheriff's sale, but was dismissed about six months later after Raymond failed to make required payments. AmeriChoice rescheduled the sheriff's sale for August 27, 2014. On the day of the rescheduled sale, Raymond filed a second Chapter 13 petition—the one that led to this appeal—stalling the sale for a second time. The Bankruptcy Court quickly granted AmeriChoice relief from the automatic stay, and the sheriff's sale was rescheduled yet again, this time for October 29, 2014. On that day, however, Sandra filed her own Chapter 13 petition, delaying the sale of the Rosses' property a third time. Sandra's case was assigned to the same Bankruptcy Judge overseeing Raymond's case, and a week later the court dismissed Sandra's petition for failure to obtain required pre-petition credit counseling. In Raymond's second case, AmeriChoice filed a motion under 11 U.S.C. § 1307(c) to either convert Raymond's case to Chapter 7 or dismiss it altogether due to what AmeriChoice saw as Raymond's bad faith use of the bankruptcy process. Following a hearing at which the debtor-husband did not appear, the Bankruptcy Court issued an Order dismissing Raymond's case “with prejudice,” and further providing that “the Debtor is not permitted to file another bankruptcy case without express permission from this Court.” Thereafter, in a subsequent motion by Appellee, the Bankruptcy Court issued an order in Sandra's bankruptcy case enjoining her "from filing another bankruptcy for 180 days" from the date of the Order. Americhoice and the debtors ultimately entered into a global settlement. Raymond sought this appeal to reverse the Bankruptcy Court's order barring further filings for him absent the Bankruptcy Court's permission.
Judge(s):
VANASKIE, KRAUSE, and NYGAARD

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