In a recent decision that highlights a key circuit split, Bankruptcy Judge Patricia M. Mayer of the Eastern District of Pennsylvania ruled that equitable powers under Section 105(a) of the Bankruptcy Code cannot be used to extend a lapsed deadline for filing a Dischargeability complaint.1
The case stemmed from a creditor's $450,000 state court judgment against an individual who subsequently filed for Chapter 7 bankruptcy. As required by Bankruptcy Rule 4007(c), the court's notice informed creditors that the deadline to file a Dischargeability complaint was 60 days after the meeting of creditors—in this case, September 23.
The creditor attended the creditors' meeting, where there was general discussion about the dischargeability deadline and potential extensions. Subsequently, the court entered an order extending the deadline—but only for the chapter 7 trustee and the U.S. Trustee—until November 23. No such extension was granted to creditors.
Despite this, the court docket incorrectly listed November 23 as the Dischargeability deadline. Relying on that date, the creditor filed its complaint on November 23. The Debtor moved to dismiss, and the bankruptcy court granted the motion on April 23.
The Argument for Equitable Relief
The creditor argued that the court should use its equitable powers to allow the late filing, given that it relied on the erroneous docket entry. But the bankruptcy court declined to do so, grounding its decision in the plain language of the Bankruptcy Rules and the structural principles of the Bankruptcy Code.
The bankruptcy court emphasized that Rule 4007(c) sets a strict 60-day deadline following the first date set for the meeting of creditors and does not allow for extensions based on excusable neglect. While section 105(a) gives courts the authority to issue orders necessary to carry out the provisions of the Bankruptcy Code, it cannot be used to override unambiguous statutory requirements.
A Circuit Split on Equitable Extensions
Judge Mayer acknowledged a division among federal appellate courts on this issue. Some courts—including those in the Sixth and Tenth Circuits—have allowed equitable extensions when courts issued incorrect deadlines or notices.2 Courts allowing an extension due to an internal court error generally point to the unfairness of a different result.3
Others, like the Eleventh Circuit, have held that statutory deadlines must be strictly enforced, even in the face of court error or misinformation.4 These courts base their decisions on the fact that creditors with knowledge of a bankruptcy case have a duty to investigate the relevant deadlines.5
Despite the creditor's plea, the bankruptcy court sided with the latter view, emphasizing that the creditor had received formal notice of the correct September deadline and did not actually receive individualized notice of the incorrect November date. Moreover, the creditor had a duty to verify deadlines and could have consulted the actual order, which made clear the extension applied only to the trustee and U.S. Trustee.6
Balancing the Harms
Judge Mayer acknowledged the equitable dilemma: enforcing the deadline harms a creditor who believed it was acting timely based on court records, while extending it would undermine the Debtor's right to finality and a fresh start.7
Ultimately, she found the Debtor's reliance on the official deadline more compelling than the creditor's reliance on a plainly erroneous docket entry. “The Debtor's reliance on the known and prescribed timeline for his fresh start is more compelling than the [creditor's] unreasonable reliance on a plainly incorrect deadline,” she concluded.⁸
The motion to dismiss was granted with prejudice.
Footnotes
1. In re Millinghausen, No. AP 24-00140 (PMM), 2025 WL 1189880 (Bankr. E.D. Pa. Apr. 23, 2025).
2. See, e.g., In re Isaacman, 26 F.3d 629, 632 (6th Cir. 1994) (late filed complaint should be allowed to proceed where second, incorrect notice was issued by mail); In re Themy, 6 F.3d 688, 690 (10th Cir. 1993) (“Although the provisions of Rules 4004 and 4007 are strictly enforced, courts have almost uniformly allowed an out-of-time filing when the creditor relies upon a bankruptcy court notice setting an incorrect deadline”); In re Anwiler, 958 F.2d at 929 (late filed complaint allowed where second, incorrect notice sent); In re Cortes, 125 B.R. 418, 420 (E.D. Pa. 1991) (reversing Bankruptcy Court dismissal of late filed claim where an incorrect second notice of the bar date was given and noting that the court agrees with the line of cases allowing untimely complaints when the creditor had relied on erroneous information from the clerk's office).
3. See, e.g., In re Leet, 274 B.R. 695, 699 (B.A.P. 6th Cir. 2002) (courts should be concerned with accusations that they “derailed justice” and should use their power to correct their own mistakes); In re Anwiler, 958 F.2d at 929 (holding that the Debtor should bear the loss; he “had greater incentive to examine and correct the notice”); In re Cortes, 125 B.R. at 421 (citation omitted) (a bar date is “too critical a facet of the Chapter 7 process to allow the deadline to slip by silently or erroneously”).
4. See, e.g., In re Williamson, 15 F.3d 1037, 1040 (11th Cir. 1994) (dismissing dischargeability complaint as untimely where counsel failed to investigate the actual notice); In re Kearney, 105 B.R. 260, 263 (Bankr. E.D. Pa. 1989) (dismissing as untimely late filed complaint where plaintiff argued that incorrect second notice of deadline merited an extension); In re Duncan, 125 B.R. 247, 249 (Bankr. W.D. Mo. 1991) (holding that due process does not require that movants receive actual notice of the bar date where they had knowledge of the bankruptcy case, even though the clerk's office had provided misinformation over the phone).
5. In re Williamson, 15 F.3d at 1039-1040 (“The equities in this case do not justify the disregard of the time provisions in the Bankruptcy Code. “[T]he time specifications set out in the Bankruptcy Code are sufficiently clear to have placed an obligation on creditor [Durham] to follow the case and to take the timely action necessary to pursue [its] claim.” The difference between no notice from the clerk and the “to be set” notice in this case does not justify different treatment. In both cases the creditor was on actual notice of the pending action. Durham could have protected itself by simply filing within the sixty day period set forth in Rule 4007. It was Durham's inaction and not any action by Morrison or the court that caused the filing to be late. Any harm to Durham could have been avoided by simply following Rule 4007.”).
6. In re Millinghausen, 2025 WL 1189880, at *5 (“Plaintiffs maintained a duty to investigate the relevant deadlines. The Plaintiffs' counsel attended the § 341 meeting and should have calculated the correct deadline accordingly. Knowledge of the relevant deadlines prescribed by the Code and Rules are ground rules, not optional guidelines, for asserting one's rights in this federal court.”).
7. In re Millinghausen, 2025 WL 1189880, at *7 (“The dilemma presented means either the Debtor will not be able to rely on the predetermined deadlines clearly imposed by the Code and Rules or the Plaintiffs will not be able to rely on a court pronouncement of the relevant deadline. Neither of these is a good outcome. In determining that the greater harm will result from allowing the deadline to be extended, I find that the Debtor's reliance on the known and prescribed timeline for his fresh start is more compelling that the Plaintiff's unreasonable reliance on a plainly incorrect deadline.”).
8. Id.
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