Yes.
According to Robin Miller of CBAR, the granting of debtor’s motion to reopen case, for purpose of avoiding creditor’s lien, would be conditioned on debtor’s reimbursing creditor for expenses incurred as result of debtor’s delay.
Generally, reopening a case for the purpose of avoiding judicial lien under Code § 522(f), Courts have long held that avoidance of a judicial lien under Code § 522(f) falls within the ambit of “cause” to reopen a case under Code § 350(b) because it presents the potential for relief to the debtor. Nevertheless, courts agree that reopening cases to avoid judicial liens should not be allowed carte blanche, but instead, there are limitations that must be recognized. First, where the court cannot afford the debtor the requested relief, the court does not abuse its discretion in refusing to reopen the case. Second, courts will not generally reopen a case if doing so will unduly prejudice an affected creditor.
Laches is an equitable defense to a motion to reopen. In re Dryja, 320 B.R. 650 (Bankr. N.D. Ohio 2005); In re Tarkington, 301 B.R. 502 (Bankr. E.D. Tenn. 2003). Laches consists of two elements: (1) unreasonable delay in asserting one’s rights; and (2) a resulting prejudice to the defending party.
The Chapter 7 debtor’s failure to file a motion to avoid a creditor’s judicial lien while the case was open, combined with the approximately 4 ½-month delay from case closure to the filing of the motion to reopen, was an unreasonable delay under the circumstances. There was no persuasive reason why the motion could not have been filed when the case was open, other than that the debtor chose not to do so for some reason. The creditor was prejudiced by the debtor’s delay in seeking to avoid its judgment lien because, after the case was closed, the creditor incurred attorney’s fees and costs in reinstating and prosecuting state-court foreclosure proceedings. Under the circumstances, the court concluded that the proper exercise of its discretion was to grant the debtor’s motion to reopen, conditioned upon the debtor’s reimbursement of the fees and costs the creditor incurred as a result of the debtor’s delay.
In re Oglesby, 519 B.R. 699 (Bankr. N.D. Ohio, Oct. 10, 2014)
(case no. 3:13-bk-32362) (Bankruptcy Judge Mary Ann Whipple)