Intending to clear up ambiguity about the deadline for an individual to take a course in credit counseling before filing bankruptcy, Congress amended Section 109(h)(1) in 2010. The debate and ambiguity continue nonetheless.
Bankruptcy Judge Kimberley H. Tyson of Denver decided that a debtor may take the course after filing, so long as the debtor took the course and filed the petition on the same day. Judge Tyson followed the plain language of the statute even though her holding may not have accomplished the result that Congress intended.
The debtor’s credit counseling certificate showed that he had completed the course about one hour after the filing of his chapter 7 petition. Sua sponte, Judge Tyson addressed the question of whether he was eligible under Section 109.
Before amendment in 2010, Section 109(h)(1) required the debtor to have taken the course “during the 180-day period preceding the date of filing of the petition.” As Judge Tyson explained in her September 30 opinion, the courts were split.
The Tenth Circuit Bankruptcy Appellate Panel allowed the debtor to complete the course up to the moment of the filing of the petition. Other courts read the statute to mean that the debtor must have completed the course no later than the day before filing.
Congress amended Section 109(h)(1) in 2010. Now, it requires completing the course “during the 180-day period ending on the date of filing.”
Courts remain divided. Some permit taking the course on the same day as filing, but after filing. Others require completing the course before filing.
Judge Tyson elected to emulate Bankruptcy Judge Laura T. Beyer of Charlotte, N.C., who permitted a debtor to complete the course after filing, but on the same day. In re Tillman, 17-30037, 2017 BL 73259, 2017 WL 933025 (Bankr. W.D.N.C. March 8, 2017). To read ABI’s report on Tillman, click here.
Judge Tyson explained the rationales given by courts that require that the course be taken before filing. Among other reasons, they believe that Congress intended for debtors to make informed choices, which could happen only if the course were taken before filing.
On the other hand, like Judge Beyer, Judge Tyson found the amended statute to be unambiguous. She consulted dictionaries to say that “date” means the day when an event occurs, not an exact moment in time.
Permitting the course to be taken after filing, but on the same day, accords with the Collier treatise, the most ordinary meaning of “date,” and the context. Furthermore, Section 109 is not jurisdictional, Judge Tyson said.
Unlike some other courts, Judge Tyson did not delve into the legislative history because “the language of the statute is plain and unambiguous.”
Finally, Judge Tyson was not persuaded by Bankruptcy Rule 1007(c), which requires filing the counseling certificate along with the petition.
Judge Tyson said that the rules may not abridge or modify substantive rights. She therefore followed the plain language of the section by allowing completion of the course after filing, but on the same day.
Intending to clear up ambiguity about the deadline for an individual to take a course in credit counseling before filing bankruptcy, Congress amended Section 109(h)(1) in 2010. The debate and ambiguity continue nonetheless.
Bankruptcy Judge Kimberley H. Tyson of Denver decided that a debtor may take the course after filing, so long as the debtor took the course and filed the petition on the same day. Judge Tyson followed the plain language of the statute even though her holding may not have accomplished the result that Congress intended.
The debtor’s credit counseling certificate showed that he had completed the course about one hour after the filing of his chapter 7 petition. Sua sponte, Judge Tyson addressed the question of whether he was eligible under Section 109.
Before amendment in 2010, Section 109(h)(1) required the debtor to have taken the course “during the 180-day period preceding the date of filing of the petition.” As Judge Tyson explained in her September 30 opinion, the courts were split.
The Tenth Circuit Bankruptcy Appellate Panel allowed the debtor to complete the course up to the moment of the filing of the petition. Other courts read the statute to mean that the debtor must have completed the course no later than the day before filing.