The Bankruptcy Act required payment of filing fees totaling $50, payable on filing, though a Supreme Court General Order allowed payment in installments over six months, extendable to nine months. Kras filed a voluntary bankruptcy petition along with an uncontested affidavit stating that he was indigent, unemployed, supported by public assistance, had no nonexempt assets, and could not pay or promise to pay the fees even in installments. He sought discharge of about $6,428.69 in debts to obtain relief from insolvency and creditor harassment and to make a new start. The District Court allowed proceedings to go forward up to, but not including, discharge, and stayed discharge pending appeal.
Issue
Whether conditioning a discharge in voluntary bankruptcy on payment of filing fees violates the Fifth Amendment's due process or equal protection component when applied to an indigent debtor unable to pay those fees. Also implicated was whether Boddie v. Connecticut required waiver of the fees.
Rule
An indigent has no constitutional right to obtain a discharge in bankruptcy without paying the filing fees required by Congress. Because bankruptcy does not involve a fundamental interest or a suspect classification and because resort to bankruptcy court is not the exclusive means of adjusting debtor-creditor relations, the fee requirement is judged by rational basis review and is constitutional if rationally justified.
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One of 10 multiple-choice questions for this case. Pick an answer to see why.
Congress creates a federal debt-relief proceeding in which an insolvent person may obtain a discharge of unsecured consumer debts only by filing in federal court and paying a $75 filing fee. The statute permits payment in monthly installments over eight months. Elena Ruiz, an indigent resident of Phoenix, cannot afford the installments and argues that the Constitution requires a waiver because the court is the only place that can issue the discharge.
How should a court most likely rule on Elena's constitutional claim?
Explanation. The majority held that Boddie does not extend to no-asset bankruptcy proceedings. A discharge of debts is a legislatively created benefit, not a fundamental constitutional right, and Congress's use of a judicial forum does not convert the benefit into a constitutional right of free court access. Because no fundamental interest or suspect classification is involved, the fee is reviewed for rational justification and may constitutionally be required.