IN RE SYKES, (Bankr.E.D.Va. 2001)

DOUGLAS TICE, Chief Judge, Bankruptcy

Final hearing was held on chapter 13 trustee's motion to dismisspro se debtors' bankruptcy case with prejudice on September 5, 2001. At conclusion of hearing, the court took the motion under advisement. For reasons stated below, the court will grant the trustee's motion.

Findings of Fact and Procedural History .

Debtors' first case, case number 00-35033-T .

Debtors, Gregory L. and Valencia D. Sykes, filed their first chapter 13 voluntary petition, case number 00-35033-T, on September 15, 2000. Chapter 13 plan, schedules and related motions were due by October 2, 2000. On October 2, debtors filed a motion for extension of time to file lists, schedules, statements, chapter 13 plan and related motions. Debtors did not cite any reason in their October 2 motion for the requested extension. On October 3, the court entered an order extending time until October 11 for debtors to file their chapter 13 plan, lists, schedules, statements and related motions.

On October 12, one day after the expiration of debtors' first extension period, debtors filed another motion for extension of time to file their chapter 13 plan, schedules, and related motions because of medical problems of both debtors. On October 25, upon certification of the United States Trustee that debtor did not appear at the § 341 meeting of creditors pursuant to Local Bankruptcy Rule 2003-1(B), an order dismissing debtors' case was entered. On November 6, 2000, debtors filed a motion to vacate the court's order of dismissal, again citing medical reasons.

Hearing was held on November 15, 2000, on debtors' motion to vacate dismissal and extend time to file lists, schedules, plan, related motions and reschedule meeting of creditors. At hearing, Mr. Sykes asserted that both he and his wife were ill at the time of the § 341 meeting, and that his wife was currently hospitalized and in critical condition.

At conclusion of hearing, the court, in a bench ruling, granted debtors' motion to vacate the court's order of dismissal entered on October 25, 2000, and allowed debtors thirty days from the date of the hearing to file plan, schedules, and necessary forms. However, the court further ordered that debtors' case would be automatically dismissed without further notice if debtors failed to file the necessary papers by the end of the thirty day extension period that ended on December 15, 2000. On December 18, 2000, after debtors failed to file the necessary papers, the court entered an order dismissing case 00-35033-T, without prejudice.

On December 21, 2000, debtors filed a second motion to vacate dismissal and a third motion to extend time to file their schedules, lists and plan and reschedule the meeting of creditors. At hearing held January 17, 2001, after hearing argument from Mr. Sykes, the court granted both of debtors' motions, vacating the December 18 dismissal and allowing an extension of time until January 29, 2001, to file plan, schedules, and necessary forms.

On January 26, debtors filed their chapter 13 plan. On February 6, Regional Acceptance Corporation fled an objection to confirmation of plan. Debtors amended their schedules on the following day.

Objections to plan were also filed by Sterling National Mortgage Corporation, Household Automotive Finance Corporation, and Bertha Judge.

Hearing on confirmation of plan was held on March 21. At hearing, Mr. Sykes stated that he was unaware that his presence was necessary at the rescheduled § 341 hearing held on March 14. In a bench ruling, the court denied confirmation of the plan and entered an order denying confirmation on same day. On the following day, March 22, 2001, debtors' bankruptcy case 00-35033-T was dismissed without prejudice, upon certification by the U.S. Trustee that debtors failed to file proper schedules, attend a § 341 meeting and make any payments in the case.

Also, on March 21, hearings were held on the motions of automobile lenders, Household Automotive Finance Corporation and Regional Acceptance Corporation, to obtain relief from stay. The court granted both motions for relief, and orders were entered on March 28 and March 30, respectively.

Debtors' second case, case number 01-32047-T .

On April 2, 2001, debtors filed their second and present chapter 13 petition, case number 01-32047-T. On April 17, debtors filed their chapter 13 plan and related motions, (first plan) The chapter 13 trustee objected to the first plan, and the objection to confirmation was sustained on July 25.

Also on April 17, Household Automotive Finance Corporation (Household) filed a motion to dismiss case with prejudice. Sterling National Mortgage (Sterling) filed a motion to dismiss with prejudice on April 23. Debtors filed a response to the motions on April 30, asserting good faith, prior hardships, and the ability to make regular payments. On May 23, hearing was held on Sterling's and Household's motions to dismiss. The court took the motions under advisement.

On April 18, Household filed a motion for relief from stay that was granted on July 25. The court issued a Memorandum Opinion and Order on July 31.

In debtors' response, they state "1) we became ill and under doctor care for approximately 4 month[s], 2) our employment was terminated and we were disabled [for] 4 months 3) we both had to be retained for other employment, 4) to take care of a family of (8) on limited income." Debtors further state that none of these four items remains a problem.

This memorandum opinion and order dispenses with the motions to dismiss filed by Household and Sterling.

On May 1, Regional Acceptance Corporation (Regional) filed a motion for relief from stay. On May 16, debtors filed an amended plan (second plan). Objections to confirmation of second plan were filed by Sterling and Household on May 31 and June 13, respectively. At hearing held July 25, the court sustained both objections to confirmation of the second plan and entered an order denying confirmation on same day.

Regional's motion for relief from stay was granted by memorandum opinion and order entered June 26. Debtors filed a motion to reconsider on July 6. At hearing on July 25, the court denied debtors' motion to reconsider.

On June 11, debtors filed another amended plan (third plan). On July 11, Household filed an objection to confirmation of third plan that was sustained by order entered July 25. Also on same day, debtors filed another amended plan that was not properly served (fourth plan). Debtors then filed another amended plan on the following day, July 26, 2001, that was also improperly served (fifth plan).

Also at hearing held July 25, the court vacated the order dismissing Valencia Darlene Sykes that was entered on June 8. Vacating order was entered on August 16.

On July 30, the chapter 13 trustee filed objection to fourth plan. Sterling filed an objection to fifth plan on August 8. At hearing held September 5, the court sustained the objections to confirmation of fourth and fifth plans and entered orders denying confirmation.

On July 31, the chapter 13 trustee filed a motion to dismiss case with prejudice for 180 days asserting that debtors have abused the bankruptcy process and have had the benefit of the § 362 stay since September 2000 without filing a confirmable plan. At hearing held September 5, the court took under advisement the trustee's motion to dismiss case with prejudice.

Trustee is referring to the time from which debtors filed first case, 00-35033-T, on September 15, 2000, as debtors never submitted a confirmable plan in either case.

On August 15, debtors filed their sixth amended plan. On August 24, Sterling filed a motion for relief from stay. Sterling filed an objection to confirmation of sixth plan on September 19. Debtors filed amended schedules on October 11 and on October 19. On October 15, GE Capital Auto Financial Services (GE Capital) filed a motion for relief from stay that was granted at hearing held November 15. At hearing held on November 14, the court sustained Sterling's objection to confirmation of sixth plan and entered order on same day.

Preliminary hearing was held on Sterling's motion for relief from stay on September 18. The matter was continued for final hearing on October 10. At final hearing held October 10, a "thirty day" order was granted conditioning stay of 11 U.S.C. § 362 upon debtors paying the sum of all post-petition payments, late charges and attorney's fees to bring them current by November 9, 2001. Order modifying stay was entered on November 6, and hearing was continued to November 15 to allow debtors time to comply with the "thirty day" order. At hearing held November 15, debtors did not appear and the court granted Sterling's motion for relief from stay.

Order granting GE Capital's relief from stay was entered on November 28.

Conclusions of Law.

The two chapter 13 cases filed by debtors have been pending for over a year. During that time debtors have never proposed a confirmable plan nor have they produced evidence of being able to sustain a confirmable plan. The court has granted relief from stay to all secured creditors whose collateral debtors sought to protect. Debtors' most recent plan has been denied confirmation, and they have failed to file another modified plan. (LBR 3015-2(C)(2) requires dismissal of a case where a debtor does not file a modified plan within ten days of denial of confirmation.)

The court is well aware that debtors have been allowed to remain in this, their second case, far beyond a reasonable time. I did this to give debtors every benefit of the doubt based upon numerous representations of Mr. Sykes concerning his and Mrs. Sykes' disabling physical conditions and promises of improved finances.

I do not doubt that the debtors have had problems, but at this juncture, the case presents a classic example of debtor abuse of the bankruptcy process. Dismissal with prejudice is appropriate and overdue.

IT IS ORDERED that debtors' chapter 13 bankruptcy case number 01-32047-T is DISMISSED WITH PREJUDICE for a period of 180 days

IT IS ORDERED that Gregory L. and Valencia D. Sykes shall be enjoined from filing bankruptcy, either individually or jointly, under any chapter of the Bankruptcy Code and in any bankruptcy court for a period of 180 days from the entry of this order; and

IT IS FURTHER ORDERED that the clerk of the court is directed to refuse acceptance of any bankruptcy petition by Gregory L. Sykes and Valencia D. Sykes, either individually or jointly, during the prohibited period.