IN RE LARIOS (Bankr.N.D.Ind. 10-15-2008)

IN RE: DANIEL LARIOS, Chapter 7, Debtor.

CASE NO. 08-21508 JPK.United States Bankruptcy Court, N.D. Indiana, Hammond Division.
October 15, 2008

ORDER FOR HEARING
J. KLINGEBERGER, Bankruptcy Judge

On September 16, 2008, the court received a letter dated September 11, 2008 under the signature of Attorney Joseph C. Lehman, to which was attached a document which appears to be designated as “Motion to Re-Open Case” [with the Division of the United States Bankruptcy Court designated as South Bend, instead of Hammond] {“the document”], and which was accompanied by a photocopy of a check under the signature of the debtor payable to Joseph C. Lehman. Apparently, Attorney Lehman also paid the $260.00 fee for re-opening this case. The document, apparently purporting to be a motion, requests re-opening of the case “for reason that debtor has not yet had the opportunity to complete the re-affirmation process with one of his secured creditors”. The record discloses that a reaffirmation agreement between the debtor and Wells Fargo Home Mortgage was filed on August 1, 2008. This agreement was not accompanied by a motion requesting its review by the court, and therefore no further action has been taken with respect to that agreement; N.D.Ind.L.B.R. B-4008-1(a). Perhaps the debtor’s counsel is referring to another agreement still in the process of negotiation: if so, in order to be effective, that agreement must have been made before the granting of the debtor’s discharge [11 U.S.C. § 524(c)(1)], and if not so made, the motion to reopen is a waste of $260.00 of somebody’s money.

The court does not usually review reaffirmation agreements unless a motion for their approval has been filed. However, due to the nature of the purported motion to re-open, the court has reviewed the reaffirmation agreement filed on August 1. Part D of that agreement

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states that the debtor’s monthly income is $1800.00, his actual current monthly expenses total $400.00, leaving him $1400.00 to make requirement payments on the reaffirmed debt. Because the amount of the monthly payment is $956.59, the agreement on its face does not disclose an “undue hardship” as defined by 11 U.S.C. § 524(m)(1). However, the Schedule I filed in this case on May 15, 2008 discloses total monthly income of $1850.00, while Schedule J filed on the same date discloses average monthly expenses of $2496.00, leaving a negative of $646.00. This discrepancy invites the court’s scrutiny as to whether statements made in the Wells Fargo reaffirmation agreement are true.

IT IS ORDERED that a hearing will be held on November 12, 2008,at 9:30 A.M., at which the following matters will be addressed:

1. Whether or not the court should grant the purported motion to re-open the case;

2. The discrepancy between the information stated in the reaffirmation agreement between the debtor and Wells Fargo Home Mortgage and the information provided in Schedules I and J filed by the debtor in this case.

IT IS FURTHER ORDERED that the debtor Daniel Larios and Attorney Joseph Lehman shall both personally appear before the court at the hearing.