In re Cleaver, 05-46572.

• Decision Date: 17 November 2005
• Docket Number: No. 05-46572.,05-46572.
• Citation: 333 B.R. 430
• Parties: In re William T. CLEAVER, Debtor.
• Court: U.S. Bankruptcy Court — Southern District of Ohio

333 B.R. 430

In re William T. CLEAVER, Debtor.

No. 05-46572.

United States Bankruptcy Court, S.D. Ohio, Western Division.

November 17, 2005.

Harold Jarnicki, Lebanon, OH, for Debtor.

Jeffrey M. Kellner, Dayton, OH, trustee.

DECISION OF THE COURT DENYING WILLIAM T. CLEAVER'S MOTION FOR WAIVER OF THE § 109(h) REQUIREMENT OF PREPETITION BUDGET AND CREDIT BRIEFING

LAWRENCE S. WALTER, Bankruptcy Judge.

This matter is before the court on William T. Cleaver's Motion for Waiver of the Requirement to Obtain Budget and Credit Counseling Prior to Filing ("Motion") [Doc. 5] filed with the court on November 3, 2005, the same date on which Mr. Cleaver's chapter 13 petition was filed. The short Motion merely represents that a sheriff's sale of Mr. Cleaver's residence was scheduled for the following day, that the petition was filed to stop the sale, and that there was "insufficient time to complete the required Budget and Credit Counseling prior to filing." The Motion further states that the required counseling would be obtained no later than November 8, 2005.¹

The referenced prepetition "budget and credit counseling" or "briefing"² is a new eligibility requirement for individuals seeking bankruptcy relief imposed by 11 U.S.C. § 109(h), added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), effective October 17, 2005.³ Generally, to be a debtor under Title 11, an individual must have received a "briefing" outlining the opportunities for credit counseling and assisting the individual in performing a budget analysis, unless certain exemptions apply. Pursuant to 11 U.S.C. § 521(b), an individual debtor must then file with the court "a certificate from the approved nonprofit budget and credit counseling agency that provided the debtor services under section 109(h) describing the services provided to the debtor" and also file a copy of any resultant debt repayment plan. 11 U.S.C. § 521(b).

As is generally the case, but especially when the court is presented with a new statute and very limited interpretive case law, the court's analysis must begin with the statutory language. United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 103 L.Ed.2d 290 (1989) ("The task of resolving the dispute over the meaning of [a code section] begins where all such inquiries must begin: with the language of the statute itself.... [W]here ... the statute's language is plain, `the sole function of the courts is to enforce it according to its terms.'"). The full text of § 109(h) is as follows:

(h) (1) Subject to paragraphs (2) and (3), and notwithstanding any other provision of this section, an individual may not be a debtor under this title unless such individual has, during the 180-day period preceding the date of filing of the petition by such individual, received from an approved nonprofit budget and credit counseling agency described in section 111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis.

(2)(A) Paragraph (1) shall not apply with respect to a debtor who resides in a district for which the United States trustee (or the bankruptcy administrator, if any) determines that the approved nonprofit budget and credit counseling agencies for such district are not reasonably able to provide adequate services to the additional individuals who would otherwise seek credit counseling from such agencies by reason of the requirements of paragraph (1).

(B) The United States trustee (or the bankruptcy administrator, if any) who makes a determination described in subparagraph (A) shall review such determination not later than 1 year after the date of such determination, and not less frequently than annually thereafter. Notwithstanding the preceding sentence, a nonprofit budget and credit counseling agency may be disapproved by the United States trustee (or the bankruptcy administrator, if any) at any time.

(3)(A) Subject to subparagraph (B), the requirements of paragraph (1) shall not apply with respect to a debtor who submits to the court a certification that —

(i) describes exigent circumstances that merit a waiver of the requirements of paragraph (1);

(ii) states that the debtor requested credit counseling services from an approved nonprofit budget and credit counseling agency, but was unable to obtain the services referred to in paragraph (1) during the 5-day period beginning on the date on which the debtor made that request; and

(iii) is satisfactory to the court.

(B) With respect to a debtor, an exemption under subparagraph (A) shall cease to apply to that debtor on the date on which the debtor meets the requirements of paragraph (1), but in no case may the exemption apply to that debtor after the date that is 30 days after the debtor files a petition, except that the court, for cause, may order an additional 15 days.

(4) The requirements of paragraph (1) shall not apply with respect to a debtor whom the court determines, after notice and hearing, is unable to complete those requirements because of incapacity, disability, or active military duty in a military combat zone. For the purposes of this paragraph, incapacity means that the debtor is impaired by reason of mental illness or mental deficiency so that he is incapable of realizing and making rational decisions with respect to his financial responsibilities; and "disability" means that the debtor is so physically impaired as to be unable, after reasonable effort, to participate in an in person, telephone, or Internet briefing required under paragraph (1).

11 U.S.C. § 109(h).

While some particulars of the statute may be ambiguous, such as the precise nature of the required briefing or the scope of "exigent circumstances," the essential import of this section is quite clear. Accord, In re Hubbard, 332 B.R. 285, 288 (Bankr.S.D.Tex.2005) ("The Court sees no ambiguity in the statute."). According to paragraph (1), to be eligible for bankruptcy relief, an individual must receive the requisite briefing absent one of the delineated exceptions set forth in paragraphs (2) or (3). Paragraph (4) makes the requirements of paragraph (1) inapplicable to a debtor unable to complete those requirements due to "incapacity, disability, or active military duty in a military combat zone." 11 U.S.C. § 109(h)(4). The statute is unequivocal and allows for no other excuse or exception.

Mr. Cleaver does not claim to be suffering from an incapacity or disability or to be on active duty in a combat zone. Therefore, the special exemption provided by paragraph (4) does not apply. Nor has Mr. Cleaver alleged that qualifying credit counseling agencies are not reasonably available so as to invoke the exception in paragraph (2). Indeed, the Office of the United States Trustee has approved several such agencies available in the Southern District of Ohio pursuant to 11 U.S.C. § 111. The approved list, obtainable from the Court Clerk's office or via a hyperlink on the Court's official web site,⁴ includes several agencies that provide services by telephone or internet as well as in person. In fact, Mr. Cleaver acknowledges that he can obtain the counseling promptly, but simply asserts that there was insufficient time prior to his bankruptcy filing, the timing of which was dictated by an imminent foreclosure sale.

Mr. Cleaver's only realistic recourse under the statute is to qualify for the 30-day exemption provided under paragraph (3). Procedurally, this paragraph requires a debtor to submit a "certification" to the court. The term "certification" is not defined in the Bankruptcy Code. According to the relevant definition in Black's Law Dictionary, a certification is "1. The act of attesting. 2. The state of having been attested. 3. An attested statement." Black's Law Dictionary 220 (7th ed.1999).⁵ The same source defines "attest" as "1. To bear witness; testify the defendant's innocence>. 2. To affirm to be true or genuine; to authenticate by signing as a witness ." Id. at 124. Similarly, Webster's Third New International Dictionary defines "certify" as "to attest esp. authoritatively or formally." Webster's Third New International Dictionary 362 (2002). Based on these definitions, a certification is, at a minimum, a written statement that the signer affirms or attests to be true.

In the instant case, Mr. Cleaver's Motion marginally comes within this minimum definition. The Motion is not an affidavit or declaration under oath and does not contain typical certification language such as "the undersigned hereby certifies" or "the undersigned hereby attests to the truth of the foregoing." But the Motion does state some facts and it is not only signed by Mr. Cleaver's attorney, but also by Mr. Cleaver, presumably to certify the truth of the statements contained therein. It is not customary in this jurisdiction for a debtor represented by counsel to sign a pleading except to verify the truth of its contents. So, as a threshold matter, while the Motion might not exhibit the desired degree of formality and clarity, the Court finds that it nevertheless qualifies as a "certification" under § 109(h)(3)(A).

It must be emphasized, however, that the form of certification in this case barely suffices and is certainly far from exemplary. Recently, a court faced with a similarly deficient unverified motion denied the requested relief holding that the motion did not constitute a certification. The court also suggested what an appropriate certification should contain:

The debtor has not filed any certification with the Court. The debtor has filed an unverified motion. It contains no affidavit, declaration or other certification as to its accuracy. The plain language of § 109(h)(3) requires a certification. Without a certification, the motion is fatally defective....