As creditors’ counsel, we have often faced debtors who file bankruptcy simply to delay and frustrate the collection process. A recent case out of the Eleventh Circuit typifies the no-nonsense attitude that bankruptcy and appellate judges take with debtors who attempt to use the Bankruptcy Code as a vehicle for delay.
In 2009 a pro se debtor filed for Chapter 7 bankruptcy and disclosed that he had nearly $40,000 in student loan obligations. The debtor filed an adversary complaint against the lender and sought a determination that his student loan obligations were dischargeable. The lender served a set of interrogatories on the debtor, which the debtor steadfastly refused to answer (even after being compelled to do so by the court). Ultimately, the court dismissed the debtor’s case.
On appeal to the district court, the debtor failed to file or serve his initial appellate brief, never requested an extension of time, and had not otherwise appeared in the case. More than five months after the debtor filed his notice of appeal, the district court sua sponte dismissed the appeal for failure to prosecute.
The debtor appealed the district court’s dismissal to the Eleventh Circuit. There, he argued that the district court erred because it was required to find willful contempt and that lesser penalties should have been assessed instead. The Eleventh Circuit rejected the debtor’s arguments, explaining that willful contempt is not required to support a dismissal for failure to prosecute an appeal. Instead, a finding of “bad faith, negligence or indifference” is sufficient. The court noted that “dismissal typically occurs in cases showing consistently dilatory conduct or the complete failure to take any steps other than the mere filing of a notice of appeal.” In regards to pro se litigants, the court noted that “liberal construction does not mean liberal deadlines.”