Chapter 7 bankruptcy is designed to provide a financially distressed debtor with a “fresh start.” Towards that end, an individual debtor’s debts are typically discharged during the case. A creditor has only a short window of time in which to object to the dischargeability of its claims. This bar date can only be extended for cause and upon the application of a “party in interest.” Occasionally, a trustee will move for such an extension on behalf of the creditors. There is a split, however, between the Fourth and Sixth Circuits regarding whether a trustee is a “party in interest” and, therefore, whether the trustee has standing to move for an extension.
This Note analyzes the trustee’s role and interests in a Chapter 7 bankruptcy case, as well as the policy interests underlying the U.S. bankruptcy system. This Note concludes that a trustee is not a “party in interest” because a trustee does not have a financial, practical, or statutorily imposed interest in the dischargeability of an individual debt. Therefore, this Note finds that the Fourth Circuit is correct in holding that a trustee does not have standing to move for an extension of the nondischargeability bar date.
Stephen C. Behymer,
Not Interested? A Trustee Lacks “Party in Interest” Standing To Move for an Extension of the Nondischargeability Bar Date on Behalf of Creditors,
82 Fordham L. Rev. 937
Available at: https://ir.lawnet.fordham.edu/flr/vol82/iss2/18