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Summarizing by Shane Ramsey

No v. Gorman

Case Type:
Case Status:
Reversed and Remanded
17-1679 (4th Circuit, May 24,2018) Published
A local rule of bankruptcy procedure that is inconsistent with the Bankruptcy Code is invalid.
Procedural context:
Debtor appealed the dismissal of her chapter 13 case and appealed to the district court which affirmed the dismissal. The 4th Circuit reversed reviewing the question of law de novo.
Debtor filed chapter 13 and failed to commence making plan payments and attend the creditors’ meeting. Local Rule 3070-1(C) states that “[i]f payments are not received as required, the trustee shall certify the same to the Clerk,” then “[u]pon receipt of such a certification, the Clerk shall enter an order dismissing the case.” The trustee filed the certification and also filed a motion to dismiss and notice of hearing of the motion to dismiss. The bankruptcy case was dismissed prior to the hearing due to the certification that was filed pursuant to Local Rule 3070-1(C). The 4th Circuit read the plain text of 11 U.S.C. § 1307(c)(4) to mean that a case could be dismissed for failure to make plan payments only after an opportunity for a hearing. Local Rule 3070-1(C) allows for dismissal without the required hearing and thus, reversal was required.
Duncan, Agee, Shedd (Duncan)

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