2009 Recent Developments in Discharge and Dischargeability Litigation

A. Commencement

1. Adversary proceeding governed by Part VIII of the Bankruptcy Rules. Bankr. R. 7001
2. Commenced by filing a complaint. Bankr. R. 7003

B. Timing and extensions of time

1. Section 523(a)(2), (4) or (6) complaint must be filed no later than 60 days after the first date set for the meeting of creditors. 11 U.S.C. S 523(c); F ED. R. BANKR. P. 4007(c)
2. No specific limitation on other dischargeability complaints. Case can be reopened without payment of additional filing fee. Bankr. R. 4007(b)
3. Complaint objecting to discharge in a Chapter 7 case must be filed no later than 60 days after the first date set for the meeting of creditors. Bankr. R. 4004(a)
4. Complaint objecting to discharge in a Chapter 11 case must be filed no later than the first date set for the hearing on confirmation. Bankr. R. 4004(a)
5. Sixty days from meeting of creditors at which debtor was present, 60 days from date first set, or 60 days from date of continued meeting?
6. Cause for extension of time
7. Party in interest must seek extension of time before original deadline expires
8. Deadline affected by notice or actual knowledge?
9. Deadline affected by debtor's misconduct
10. Effects of clerk's office notice and administrative mistakes
11. Conversion from Chapter 11 to Chapter 7 commences new period
12. Can timeliness of complaint be waived?
13. Effect of conversion to Chapter 13

C. Statutes of limitations

Mitchell v. Bigelow (In re Bigelow), 393 B.R. 667 (B.A.P. 8th Cir. 2008) (Complaint to determine dischargeability of unscheduled debt under S 523(a)(3)--filed before expiration of state statute of limitations with respect to underlying claim, that asked permission to file suit in state court but did not seek judgment on underlying claim--did not toll or satisfystatute of limitations; dischargeability complaint was appropriately dismissed when statute of limitations expired without further action by plaintiff. Debtors received discharge in Chapter 7 case closed in January, 2006. Twenty-one months later, on October 5, 2007, plaintiff filed adversary proceeding to determine dischargeability together with motion for leave to file state court lawsuit alleging that debtors had failed to list plaintiff in the prior bankruptcy and alleging that statute of limitations on the underlying action would expire on October 29, 2007. On November 29, 2007 -- after the statute of limitations expired -- debtors moved to dismiss. "Mitchell now asserts that 11 U.S.C. S 108(c) tolled the statute of limitations on his claim for 112 days--the length of time the automatic stay was in effect in the Debtors' bankruptcy case…[T]his argument misconstrues the operation and effect of S 108(c)(1). Section 108(c)(1) does not independently toll or suspend statutes of limitations which have not expired as of a

©2009 Keith M. Lundin