In re Talib, 05-71954.

• Decision Date: 01 December 2005
• Docket Number: No. 05-71954.,05-71954.
• Citation: In re Talib, 335 B.R. 417 (Bankr. W.D. Mo. 2005)
• Parties: In re Moneica L. TALIB, Debtor.
• Court: U.S. Bankruptcy Court — Western District of Missouri

Page 417

335 B.R. 417

In re Moneica L. TALIB, Debtor.

No. 05-71954.

United States Bankruptcy Court, W.D. Missouri.

December 1, 2005.

Frank E. Brown, Kansas City, MO, for Debtor.

ORDER DENYING MOTION TO WAIVE DEBT COUNSELING PRIOR TO FILING

DENNIS R. DOW, Bankruptcy Judge.

The issue before the Court is the adequacy, under § 109(h)(3), of Debtor's certification of Exigent Circumstances and Motion to Waive Debt Counseling Prior to Filing. More specifically, the issue is whether a debtor who waits until the afternoon prior to the day of a scheduled foreclosure sale to seek credit counseling and is told by the credit counseling service that the required counseling can be provided within two days — less than five days subsequent to her request, but after the scheduled foreclosure sale — is eligible for a waiver of the prepetition credit counseling requirement. For all the reasons set forth below, this Court holds that the Debtor's certification does not meet the requirements of § 109(h)(3), that the Debtor is not eligible to be a debtor and that the case must be dismissed.

I. FACTUAL BACKGROUND

Debtor filed a petition initiating a case under Chapter 13 of the Bankruptcy Code on November 18, 2005. In lieu of a certificate evidencing her having obtained the briefing required by § 109(h)(1), Debtor filed a Certification of Exigent Circumstances and Motion to Waive Debt Counseling Prior to Filing ("Certification"), seeking, pursuant to § 109(h)(3), a waiver of the requirement of prepetition credit counseling. The Certification, which was submitted by her counsel, was accompanied by a separate statement signed by the Debtor attesting to the facts alleged in the Certification. In the Certification, Debtor asserted that a foreclosure sale of her residence was scheduled to occur sometime between the hours of 9:00 a.m. and 5:00 p.m. on November 18, 2005 and that she first contacted counsel about the possibility of filing a Chapter 13 proceeding to halt the foreclosure at 4:45 p.m. on November 17. According to the Certification, the Debtor was immediately instructed to contact Consumer Credit Counseling of Springfield, Missouri ("CCC"). Debtor reported back to her counsel that she had contacted someone at CCC who suggested that she download and complete forms for the required credit counseling on the CCC website and advised that she would be contacted by a counselor soon thereafter. Apparently anxious about the completion of her credit counseling, Debtor contacted CCC at 8:00 the following morning to determine when her counseling might be completed. She was told that the counseling could be completed within approximately two days, but not by noon on November 18, 2005 (apparently the precise time at which the foreclosure sale was scheduled to be conducted). The Certification then asserts that counsel could not be assured of obtaining a certificate of completion before filing the petition in time to halt the scheduled foreclosure sale and requests that the Court consider the cited circumstances to be exigent, grant a waiver of the prepetition credit counseling requirement and authorize Debtor to submit the certificate within 30 days.

II. DISCUSSION AND ANALYSIS

A. Applicable Law

Added to the Bankruptcy Code by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("Act"), § 109(h)(1) requires that an individual debtor receive, prior to the filing of the petition, certain counseling from an approved credit counseling agency during the 180-day period prior to the filing in order to be eligible for relief under any chapter of Title 11. 11 U.S.C. § 109(h)(1).¹ Section 521(b)(1) implements this provision by adding to the list of documents required to be filed at the commencement of a case a certificate from the agency providing those services. 11 U.S.C. § 521(b)(1). Proposed amendments to the Federal Rules of Bankruptcy Procedure (adopted as local rules) require that document to be filed "with the petition in a voluntary case." Interim Bank. R. 1007(b)(3) and 1007(c). A debtor may obtain an exemption from the requirement of receiving those services prior to the filing of the petition under the exigent circumstances exemption contained in § 109(h)(3). In order to qualify for that waiver, the debtor must file a "certification" which must: (1) describe exigent circumstances that merit a waiver of the requirement of prepetition credit counseling; (2) state that the debtor requested credit counseling services from an approved agency, but was not able to obtain the services during the five-day period beginning on the date of the debtor's request; and (3) be satisfactory to the court. 11 U.S.C. § 109(h)(3)(A). This certification must be filed "with the petition in a voluntary case." Interim Bank. R. 1007(b)(3) and 1007(c). Because the requirements are stated in the conjunctive, each of the three requirements must be satisfied for the debtor to qualify for the described exemption. In re Cleaver, 333 B.R. 430, 434-35 (Bankr.S.D.Ohio 2005); In re Watson, 332 B.R. 740, 745-46 (Bankr.E.D.Va.2005); In re Gee, 332 B.R. 602, 604 (Bankr.W.D.Mo.2005); In re Hubbard, 332 B.R. 285, 288 (Bankr.S.D.Tex. 2005).

As to the formal requirements of the certification, the statute offers little or no guidance. Although it describes the required document as a "certification", it does not define the term and contains no specific requirements as to the form of the document. Several courts have held, relying upon 28 U.S.C. § 1746, that the certification must be subscribed to as true under penalty of perjury. In re LaPorta, 332 B.R. 879, 881-82 (Bankr.D.Minn.2005); In re Hubbard, 333 B.R. 373, 375-76 (Bankr.S.D.Tex.2005). That statute provides that whenever a law, rule, regulation or order requires that a matter be supported by a "sworn declaration, verification, certificate, statement, oath or affidavit" the matter may be supported by an unsworn document of similar type subscribed to as true under penalty of perjury, in a form prescribed by the statute.² This Court is not convinced that the cited statute requires that a certification seeking a waiver under § 109(h)(3) must be signed under penalty of perjury. First, § 109(h)(3) requires the filing of a "certification", which, while close, is not one of the precise terms used in 28 U.S.C. § 1746. Second, the requirement that the petition and other documents filed with the petition be verified or contain an unsworn declaration under penalty of perjury, is contained in Rule 1008, which says, in its entirety: "All petitions, lists, schedules, statements and amendments thereto shall be verified or contain an unsworn declaration as provided in 28 U.S.C. § 1746." As noted above, Rule 1007 was amended (on an interim basis) to require that the certification for a waiver based on exigent circumstances be filed with the petition. This certification, however is not a "petition, list, schedule, statement or amendment" and is therefore not encompassed by the language of Rule 1008. No amendment has been made or proposed to that rule to reference this requirement; it therefore does not specifically require that the certification be verified or contain the unsworn declaration required by 28 U.S.C. § 1746.³ Accordingly this Court holds that a certification of exigent circumstances under § 109(h)(3) need not be made under penalty of perjury. See Cleaver, 333 B.R. 430, 433-34 (noting that "certification" is not defined in the Bankruptcy Code, that standard dictionary definitions of the term require at a minimum a written statement that the signer affirms or attests to be true and holding that certification signed by counsel and the debtor qualifies under § 109(h)(3)(A) despite not being affidavit or declaration under oath or containing typical certification language). As to other formal requirements, this Court adopts the suggestion in Hubbard, that the certification must "set forth the facts underlying any alleged exigent circumstances, the date(s) on which the debtor requested credit counseling, which agencies were contacted to render the services, why the debtor believes that the services could not be obtained before the filing, and when the services are reasonably likely to be obtained." Hubbard, 332 B.R. at 289. Accordingly, in the future the Court will expect certifications filed under § 109(h)(3) to be signed by the debtor and contain this information. Certifications not meeting these requirements will be rejected.⁴

B. Adequacy of the Debtor's Certification

Having considered the formal requirements for a certification, the Court now must assess the substantive adequacy of the Certification filed in this instance. As noted above, the statute makes the exigent circumstances exception available only to debtors who satisfy each of the requirements of § 109(h)(3). That paragraph imposes three requirements, two subjective and one objective. The subjective tests require that the Court find that there are exigent circumstances that "merit a waiver" of the prepetition credit counseling requirement and that the Certification is "satisfactory to the court." The objective requirement is that the Certification allege that the debtor requested credit counseling prior to the filing of the petition from an approved agency but was told that the services would not be available for more than five days subsequent to the date of the request.

Here, the Debtor alleges that she first consulted counsel and sought credit counseling at approximately 5:00 p.m. on the afternoon prior to the date of the scheduled foreclosure sale on her residence. At first blush, the imminence of the proposed sale would appear to satisfy the exigent circumstances requirement. See, e.g., In re Hubbard, 333 B.R. 377, 384-85 (Bankr.S.D.Tex.2005). Upon closer examination, this Court has some doubt on the issue. The statute requires that the Court find that there are exigent circumstances that "merit a waiver" of the requirement that the debtor...