IN RE: ZUBIN CYCLEWALA (2025)

Chapter 7

ORDER DENYING MOTION TO RECONSIDER AND AMENDING ORDER DENYING APPLICATION TO WAIVE CHAPTER 7 FILING FEE

This matter came before the court on the motion of Zubin Cyclewala (“Debtor”) to reconsider (“Motion to Reconsider”) the order denying Debtor's application to waive the chapter 7 filing fee. Debtor initially filed an application for waiver of the chapter 7 filing fee (“Application”) with his petition on October 28, 2025. The court entered an order denying the Application on November 10, 2025 (“Order Denying Application”), providing a schedule for installment payments. On December 1, Debtor filed the Motion to Reconsider and noticed it for hearing on December 3, 2025.

Since the Motion to Reconsider was filed more than fourteen days after entry of the Order Denying Application, Fed. R. Bankr. P. 9024 governs. Rule 9024 makes Fed. R. Civ. P. 60 applicable in bankruptcy cases:

(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:

(1) mistake, inadvertence, surprise, or excusable neglect;

(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);

(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;

(4) the judgment is void;

(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or

(6) any other reason that justifies relief.

Fed. R. Civ. P. 60.

The standard for granting relief under Rule 60 is very difficult to satisfy. “It is an extraordinary remedy granted only in exceptional circumstances.” Matter of Rees, 817 F. App'x 258, 260 (7th Cir. 2020) (nonprecedential order) (quotation omitted). See also Bakery Mach. & Fabrication, Inc. v. Traditional Baking, Inc., 570 F.3d 845, 848 (7th Cir. 2009). “[R]elief under Rule 60(b)(6) in particular – the catchall provision – is even more extraordinary.” Rees, 817 F. App'x at 261.

“Section 1930(a) specifies fees for filing bankruptcy cases. Fees to commence the case must be paid[.]” Bastani v. Wells Fargo Bank, N.A., 960 F.3d 976, 977 (7th Cir. 2020). There is an exception for chapter 7 debtors who meet the eligibility requirements. See 28 U.S.C. § 1930(f)(1). First, the court must determine that the debtor has “income less than 150 percent of the income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved[.]” Id. Second, the court must find that the debtor is unable to pay the filing fee in installments. Even if a debtor satisfies both requirements, § 1930(f)(1) does not require courts to waive the filing fee. The decision to do so is at the court's discretion. See In re Ballard, 617 B.R. 577, 579 (Bankr. E.D. Mich. 2020).

In order to aid courts in determining whether debtors satisfy the first requirement, the website for the Federal Courts of the United States publishes a document (“IFP Guidelines”) that sets forth the monthly amounts for each household size that are 150 percent of the official poverty line. See www.uscourts.gov/sites/default/files/2025-01/ifp-monthly-poverty-guidelines- 2025.pdf (last retrieved December 9, 2025). According to Debtor's Application and Schedule I, he receives $292 in non-cash governmental assistance and his household size is 1. The IFP Guidelines provide that for a family unit of 1 person who lives in the contiguous 48 states, 150 percent of the official poverty line is $1,956.25 per month. Moreover, the IFP application directs debtors to subtract any non-cash governmental assistance. Therefore, for purposes of considering whether to waive the filing fee, Debtor's income is $0. Debtor satisfied the first requirement of 28 U.S.C. § 1930(f)(1).

The second requirement is to demonstrate that Debtor is unable to pay the filing fee in installments. While the first prong is objective, the second prong of the test is:

based upon the totality of the circumstances. In answering the question the court may consider facts beyond those elicited on the official form and courts have looked at a variety of factors including: the accuracy of the information given; discrepancies between the application, statement of affairs and schedules; any collateral resources, such as friends or family, the debtor may be able to call upon; debtor's expenses and whether any of them could be redirected to pay the filing fee; whether the debtor has agreed to pay an attorney; and, whether the debtor has any exempt property that could somehow be used to raise the money to pay the fee.

Matter of Smith, No. 15-10762, 2015 WL 5602589, *1 (Bankr. N.D. Ind. May 11, 2015) (citations and quotation omitted). The burden to persuade the court is on the debtor “to prove by a preponderance of the evidence that their circumstances satisfy the requirements of the statute.” In re Burr, 344 B.R. 234, 236 (Bankr. W.D.N.Y. 2006).

Debtor alleged in the Motion to Reconsider that he “is unable to pay the fee in installments due to complete financial hardship. Debtor is chronically homeless, has zero income, has zero savings, has government assistance SNAP $298/mo, and no assets․. Debtor has no employment income, minimal assets, and is unable to meet basic living expenses.” Motion to Reconsider, ¶¶ 3-5. He appeared in court to prosecute the Motion to Reconsider, responding to the court's questions both about the allegations in his motion as well as his circumstances in general.

Having considered the allegations in the Motion to Reconsider as well as the Debtor's presentation in court, the court heard nothing that would change its initial decision to deny the Application, let alone meet the high burden for reconsideration under Rule 60. Indeed, the Motion to Reconsider and Debtor's allegations support the court's exercise of its discretion in declining to waive the filing fee.

First, Debtor alleged that he is chronically homeless, yet he has a mailing address at a family residence. He confirmed that he has several places where he “couch surfs” and is residing with friends. In 2023 and 2024, Debtor received several thousand dollars each year, the source of which is described in answer to Question 5 on his Statement of Financial Affairs as “family.” Although those contributions stopped this year, Debtor provided no explanation of why family is not a potential source for paying the filing fee. Even without contributions from his family, Debtor's Schedules I and J show a surplus of $32 ¹ each month.

In the Motion to Reconsider and on Schedule I, Debtor stated that he has no employment income. In his presentation in court, he explained that he has not been able to find employment in his field and has expanded his search to other fields. However, the ability to obtain interim employment in another field, whether professional or not, even if simply enough to pay the filing fee, or whether his family will contribute to a filing fee, was not ruled out.

On the same day that he filed his petition for relief under the Bankruptcy Code, Debtor filed an adversary proceeding against the U.S. Department of Education. According to the allegations in that complaint, Debtor attended a local university and a local college and received some higher education. He decided to withdraw after incurring student loans but not completing the degree requirements. In his adversary proceeding, Debtor seeks to discharge approximately $29,106. Debtor was not required to pay the adversary filing fee when he filed this proceeding.

In addition to $29,106 in student loan debt, Debtor seeks to discharge $20,158 in other nonpriority unsecured claims, some of which were incurred as recently as this year. All of this would be accomplished without paying the $338 filing fee.

The burden on the court system to administer a bankruptcy case and an adversary proceeding is substantial. Meanwhile, the Debtor gains the immediate benefit of the automatic stay as well as the potential benefit of a discharge of nearly $50,000 in debt.

Even if the court determined that Debtor satisfied both prongs of the test in 28 U.S.C. § 1930(f)(1), it has discretion in deciding whether to waive the filing fee. In other words, even if a debtor has income below the poverty level and cannot pay the filing fee in installments, a court may deny the request to waive the fee. As the Supreme Court explained, “[t]here is no constitutional right to obtain a discharge of one's debts in bankruptcy.” United States v. Kras, 409 U.S. 434, 446 (1973).

Debtor has not satisfied his burden under 28 U.S.C. § 1930(f). Even if he had, in the court's discretion the benefit of the waiver in comparison to the burden on the bankruptcy system is not justified. There is no basis for the “extraordinary remedy granted only in exceptional circumstances” of reconsidering the court's original decision on the Application.

Fed. R. Bankr. P. 1006(b)(2) states that all installment “payments must be made within 120 days after the petition is filed. The court may, for cause, extend the time to pay an installment, but the last one must be paid within 180 days after the petition is filed.” Debtor filed for relief under chapter 7 of the Bankruptcy Code on October 28, 2025, so the last installment of his filing fee must be paid on or before April 27, 2026.

Therefore, IT IS ORDERED THAT the Order Denying Application is amended to provide that the four installments of the filing fee are due on the following schedule:

Amount Date $84.50 January 5, 2026 $84.50 February 9, 2026 $84.50 March 17, 2026 $84.50 April 27, 2026

For the reasons stated above, IT IS FURTHER ORDERED THAT the Motion to Reconsider is DENIED.

FOOTNOTES

1.   Schedule J purports to show monthly net income of $22. But Debtor incorrectly added up his expenses. His total monthly expenses are $260, not $270.

DAVID D. CLEARY United States Bankruptcy Judge