Exigent Circumstances
Posted: Fri Feb 10, 2012 7:24 am
In re Otero, 09-71420 TG, 2010 WL 580033 (Bankr. N.D. Cal. Feb. 12, 2010)
same court year later read *In re Romero *differently. The Romeros only
tried to get the counseling 3 days before filing, but code requires 5 days.
So in this case the judge denied the motion and they had to refile.
United States Bankruptcy Court,
N.D. California.
In re T. Donald OTERO, Debtor.
No. 0971420 TG.
Feb. 12, 2010.
Opinion
*MEMORANDUM AND ORDER DISMISSING CASE*
LESLIE TCHAIKOVSKY, Bankruptcy Judge.
*1 The above-captioned chapter 13 case was filed on November 30, 2009. On
the same day, the above-captioned debtor (the Debtor) filed a motion for
a temporary waiver of the pre-petition credit counseling requirement
pursuant to 11 U.S.C. 109(h)(1). In his declaration, the Debtor stated
that he filed his bankruptcy petition on November 30, 2009 to stop the
foreclosure sale of his home which was scheduled to take place that day, at
1:30 p.m. He stated that he contacted a credit counseling agency 45 minutes
before the scheduled foreclosure sale and was advised that the counseling
process would take 45 minutes if done over the Internet. However, he did
not have access to the Internet. He was advised that the process would take
longer if conducted by other means. Under the circumstances, the Debtor
stated, he was forced to file for bankruptcy prior to completing the
counseling in order to save his home. On December 23, 2009, the Debtor
filed a Certificate of Credit Counseling, indicating that he had completed
the counseling process that day.
On January 15, 2010, the chapter 13 trustee (the Trustee) filed an
objection to the Debtor's motion. The objection asserted that 11 U.S.C.
109(h)(3) acknowledges that the pre-petition credit counseling requirement
may be waived due to exigent circumstances. However, according to the
objection, 11 U.S.C. 109(h)(4) delineated the circumstances under which
the requirement may be waived: i.e., incapacity, disability, or active
military duty in a military combat zone. Since the Debtor satisfied none of
these circumstances, the Debtor was not entitled to the requested waiver.
On January 27, 2010, the Debtor filed a reply to the Trustee's objection.
In the reply, the Debtor noted that he was not seeking a permanent waiver
of the credit counseling requirement pursuant to 11 U.S.C. 109(h)(4),
merely a temporary waiver pursuant to 11 U.S.C. 109(h)(3). He contended
that the circumstances that he had described qualified as exigent
circumstances as required by 109(h)(3). In support of this contention,
he cited *In re Romero,* 349 B.R. 616 (Bankr.N.D.Cal.2006). In
*Romero,*the bankruptcy court held that filing to halt an imminent
wage garnishment
qualified as an exigent circumstance. The Debtor contended that, if *
Romero* was correct, the imminent foreclosure of one's home should also
qualify as an exigent circumstance.
Section 109(h)(3) provides that the debtor may obtain credit counseling
post-petition provided he:
... submits to the Court a certification that
(i) describes exigent circumstances that merit a waiver of the
[pre-petition credit counseling] requirements ...;
(ii) states that the debtor requested credit counseling services from an
approved nonprofit budget and credit counseling agency, but was unable to
obtain ... [pre-petition credit counseling] during the 5day period
beginning on the date on which the debtor made that request;
*2 and
(iii) is satisfactory to the court.
11 U.S.C. 109(h)(3). Thus, there are three prongs that a debtor must
satisfy to obtain a temporary waiver of the pre-petition credit counseling
requirement. The Court agrees with the Debtor that the imminent foreclosure
of one's home satisfies the first prong of 109(h)(3). However, the Debtor
is unable to satisfy the second prong.
In *Romero,* the debtors stated that they first contacted a credit
counseling three days before the petition date and were informed that they
could not obtain credit counseling agency for a week. This would have been
too late to stop the wage garnishment. The *Romero* court held that this
satisfied 11 U.S.C. 109(h)(3) and granted them a temporary waiver. Thus,
under the approach taken by the *Romero* court, the Debtor would be
entitled to a temporary waiver of the pre-petition credit counseling
requirement if the credit counseling agency had stated that it could not
provide counseling within five days even though the request was made only
45 days before the petition was filed.
The Court reads 109(h)(3) somewhat differently than the *Romero* court.
The Court reads the statute to require the request to be made at least five
days before the bankruptcy filing. However, even under the *Romero* reading
of the statute, the Debtor would not qualify for a temporary waiver. The
credit counseling agency contacted by the Debtor was willing and able to
provide counseling within five days. Thus, the Debtor is unable to satisfy
the second prong of 109(h)(3).
The Court concludes that the above-captioned case must be dismissed due to
the Debtor's failure to obtain pre-petition credit counseling and his
failure to qualify for a temporary waiver of this requirement pursuant to
11 U.S.C. 109(h)(3). Based on the foregoing, it is
SO ORDERED.
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