Case No. 99-10085, Chapter 7United States Bankruptcy Court, D. Wyoming
September 13, 2001
ORDER DENYING MOTION TO DISMISS
NEED JUDGE, United States Bankruptcy Judge.
This case came before the court on the chapter 7 trustee, Randy Royal’s objection to the debtor’s claim of a homestead exemption. At the hearing, held August 17, 2001, the debtor, Marjorie Louise Haworth, failed to address the homestead issue. Instead, she orally moved to dismiss this chapter 7 case. For the reasons stated on the record, and herein, the motion is denied.
The debtor orally moved the court to dismiss the case pursuant to 11 U.S.C. § 305. That section, which provides for dismissal of a case when abstention is warranted, is inapplicable to the circumstances of this case. No insolvency proceedings are pending elsewhere, and the debtor has made no arrangement to otherwise protect the rights of creditors.
The court will treat the debtor’s comments as a motion under § 707(a). That section provides: “the court may dismiss a case under this chapter only after notice and a hearing and only for cause[.]” Obviously there was no notice and hearing as defined by § 102(1) and Fed.R.Bankr.P. 2002 (a)(4). Regardless, the court concludes there is no cause to dismiss the case.
On March 17, 1999, Ms. Haworth filed this voluntary chapter 7 case pro se to avoid litigation initiated by her daughter. Despite admonitions from the court and the trustee that she should obtain counsel, the debtor continues to represent herself.
At filing, the material property of the estate consisted of an interest in a purported trust to which the debtor had transferred real property. After extensive litigation between the trustee and the debtor, the transfer was avoided, and the trustee is in the process of liquidating the estate.
The only creditor to file a proof of claim is the debtor’s daughter, Lori Lea Lewis. Ms. Lewis filed an adversary proceeding seeking a determination that the debt owed to her by Ms. Haworth was not dischargeable under § 523(a). After it became clear to Ms. Lewis that the estate contained sufficient value to pay her claim in full, Ms. Lewis sought and the court dismissed the adversary proceeding. Ms. Lewis filed a timely proof of claim on February 17, 2000.
Ms. Haworth claims there are no “legitimate” claims to be paid from the estate. She apparently so contends because the Lewis adversary proceeding was dismissed. However, Ms. Haworth misunderstands the distinction between a nondischargeability action related to her personal liability and a claim filed against the estate.
Ms. Haworth received her chapter 7 discharge on July 15, 1999. With the dismissal of the adversary proceeding, she has been discharged of all personal liability on the Lewis debt. But, the claim against the estate remains, and Ms. Lewis is entitled to receive distribution from the estate regardless of the debtor’s discharge.
Under § 704, Mr. Royal has a fiduciary duty and a responsibility to the creditors to liquidate the assets of the estate and pay the claims. The estate appears solvent, and thus, to the extent Ms. Haworth delays and obstructs the proceedings in this and the state court, she merely increases the interest accruing on claims pursuant to § 726(a)(5), to her own disadvantage.
Summing up, the debtor has been discharged of her individual liability on any prepetition claims, a legitimate claim against the estate is filed, liquidation is in process, considerable prejudice to the creditor would result were this voluntary case dismissed, and therefore, no cause exists. IT IS, THEREFORE, ORDERED that the debtor’s motion to dismiss her case is denied.