Oscar O Rodriguez and Elizabeth Olivo

1 Section 109(h)(1) requires:
(continued...)
MEMORANDUM OF DECISION - 1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF IDAHO
IN RE 	)
)
RODRIGUEZ, OSCAR O. and 	) 	Case No. 05-05694-TLM
OLIVO, ELIZABETH, 	)
)
Debtors. 	) 	MEMORANDUM OF DECISION
)
________________________________ )
INTRODUCTION
Oscar Rodriguez and Elizabeth Olivo (“Debtors”) filed a voluntary joint
bankruptcy petition under chapter 13 of the Bankruptcy Code, Title 11 of the U.S.
Code, on November 2, 2005. See Doc. No. 1. Since their petition was filed after
October 17, 2005, the Bankruptcy Code amendments of the Bankruptcy Abuse
Prevention and Consumer Protection Act of 2005, Pub. L. No. 109-8, 119 Stat. 23
(2005) (“BAPCPA”), apply.
BAPCPA significantly altered the procedural and substantive requirements
for obtaining bankruptcy relief. One such change is at issue here: the pre-
bankruptcy credit counseling now required under § 109(h) as a condition of
eligibility of individuals to file. 1
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1(...continued)
(h)(1) Subject to paragraph (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.
MEMORANDUM OF DECISION - 2
BACKGROUND AND FACTS
A. 	Debtors’ petition and their initial submissions
Debtors’ petition indicated in the required box on Official Form 1
addressing the “Certification Concerning Debt Counseling by Individual/Joint
Debtor(s)” that:
G 	I/we have received approved budget and credit counseling during
the 180-day period preceding the filing of this petition.
O I/we request a waiver of the requirement to obtain budget and credit
counseling prior to filing based on exigent circumstances. (Must attach
certification describing.)
See Doc. No. 1 at 2 (emphasis added). Despite their indication that this second
paragraph applied, Debtors’ petition included no “attach[ed] certification
describing” the exigent circumstances. Id.
On November 3, the day after filing their petition, Debtors filed a “Request
for Waiver of Timely Filing of Title 11 U.S.C. § 109(h) Credit Certificate.” See
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2 The Debtors filed a duplicate Request on November 8. See Doc. No. 13. It added only
the case number to the caption. Therefore, the Court simply cites and discusses the original
Request.
MEMORANDUM OF DECISION - 3
Doc. No. 6 (the “Request”). 2
The Request alleges in material part:
– 	that Debtor Elizabeth Olivo was facing a wage garnishment, which
would be effective unless a bankruptcy notice was received by her employer’s
payroll department prior to November 3;
– 	that on November 2, Debtors met with counsel and attempted to contact
via the Internet an approved credit counseling entity, was advised to call for a user
name and password, but was left with a ringing, unanswered phone;
– 	that on the same afternoon, Debtors contacted another approved credit
counseling entity over the Internet, entered financial information, were instructed
to enter a “chat room” for assistance but, finding no one there called a number for
assistance, and were told that the information would be retrieved in an hour after
which a counselor would call Debtors to schedule an appointment;
– 	that to prevent the garnishment, Debtors were required to file their
petition before the credit counseling could occur.
Id. at 1-2.
The Request was signed by Debtors’ attorney. It was not verified or signed
by Debtors. Id. Debtors did not file an affidavit in support of the Request or any
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3 The absence of the U.S. Trustee appears intentional; in addition to receiving notice, its
counsel was present in the Court’s gallery when the case was called. The Court expresses its
strong disapproval of the U.S. Trustee’s elected course, and its lack of participation on an issue of
first impression under BAPCPA that is so closely aligned with the U.S. Trustee’s supervision and
enforcement responsibilities.
4 They are essentially identical and, indeed, verbatim in all material allegations.
MEMORANDUM OF DECISION - 4
similar submission.
The Request was not set for hearing. Nor did Debtors bring it to the
attention of the Court, by tendering a proposed order or otherwise. Following
discovery of the Request in a general review of files, the Court immediately set the
matter for hearing on November 21, 2005.
Debtors appeared, as did the chapter 13 trustee. The trustee raised no
objection to the Request and did not comment upon it. The office of the United
States Trustee, though provided notice, did not appear and filed no written
submission.3
B. 	Debtors’ post-hearing submissions
On November 21, subsequent to the hearing, each Debtor filed a
“certificate” in support of the Request. See Doc. No. 21 (the “First
Certifications”).4 Debtors state:
On November 2, prior to filing my bankruptcy petition, I met with my
attorney . . . at his office. 	While at his office, I requested credit
counseling services from an approved nonprofit budget and credit
counseling agency, via internet and telephone. I was unable to obtain
services for an individual or group briefing outlining the opportunities
for available credit counseling and assisting me in performing a related
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5 As will be discussed, these additional facts create problems for Debtors. The Court
presumes their counsel appreciated that fact, but concluded the Second Certification should be
filed nevertheless. The Court commends him for his candor. See Idaho Rule of Professional
Conduct 3.3 (Candor toward the tribunal).
MEMORANDUM OF DECISION - 5
budget analysis during the 5-day period beginning on November 2,
2005.
Id. at 1-2 (internal paragraph designations omitted). The First Certifications were
signed and certified by Debtors under penalty of perjury as true and correct. Id. at
3.
Debtors’ counsel had alluded to these impending certifications at the time
of the hearing. The Court deferred ruling at hearing, and allowed Debtors until
November 25 within which to file them and any and all other materials they
wanted the Court to consider in connection with the Request.
On November 24, Debtor Olivo’s “2nd certification” in support of the
Request was filed. See Doc. No. 24 (the “Second Certification”). In this
document, Debtor certified, again under penalty of perjury, additional facts and
details.5
The Second Certification states that Debtors’ initial contact with counsel
occurred a month before the filing, on October 5, 2005, following a wage
garnishment on September 26. Debtor Olivo also states that “I knew the
[bankruptcy] laws were changing, but was not specifically aware of the credit
counseling requirement. I thought I would file prior to the bankruptcy law
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MEMORANDUM OF DECISION - 6
changes, but was unable to come up with the filing fee and attorneys fees at that
time.” Id. at 1.
Following further garnishments on October 6 and on October 24, and
Debtor Rodriguez’s loss of work on October 24, Debtor Olivo determined the
bankruptcy was needed. She contacted counsel again on November 1, and during
that call the credit counseling requirement was specifically discussed. Id. at 1-2.
Because Debtors lacked Internet access and since Debtor Rodriguez did not
speak English, their counsel suggested they come to his office the following day,
November 2, to explore counseling options over the telephone and Internet. Id. at
2. This is what occurred according to Debtor Olivo:
I took time off work and my husband and I met with [counsel] at his
office [on November 2]. [Counsel] called the first credit counseling
place, but only received continual rings with no answer. [Counsel] then
accessed a website for a second counseling agency. The counseling
website began asking us to input information. 	We spent the next 2
hours inputting all of our creditors, and amounts due on debts, and
inputting all our budget income and expenses. 	I interpreted for my
husband as we went through the process. 	At the end of the input
process, we were directed to enter a chat room which we did, but there
was no response. After that, [counsel] contacted the counseling agency
by telephone. He spoke to a person on the phone who said they could
download our information but that there was no qualified credit
counselor available, and that he was not qualified. 	The person told
[counsel] that it would cost $100.00 for the both of us. While we did
not have $100.00 at that time, [counsel] could have paid the fee from
the money we had given his firm using the firm’s debit card.
Id. at 2-3.
Since it was late, and given the desire to stop the November 3 garnishment,
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6 Debtors also filed a brief on November 25, Doc. No. 25, which has been considered.
No other parties made submissions or arguments.
7 By its terms, the counseling provision of § 109(h)(1) applies only to debtors who are
individuals. See also § 101(13) (defining “debtor”), § 101(41) (defining “person”). Accord In re
Montoya, No. 05B-80022, 2005 WL 3160532, at *3 n.9 (Bankr. D. Utah November 23, 2005)
(addressing definition of “individual” in connection with BAPCPA amendments in § 362(c)(3)).
MEMORANDUM OF DECISION - 7
and because their counsel “advised [Debtor Olivo] that there was an exception to
the credit counseling requirement for exigent circumstances, and that our
circumstances might qualify,” Debtors decided to file that evening. Id. at 3. After
filing, Debtors contacted yet another (i.e., a third) credit counseling agency, and
made arrangements to obtain the counseling from it. Id.
Having considered Debtors’ arguments and submissions6 regarding several
issues of first impression generated under BAPCPA and these facts, the Court
enters this Decision, which constitutes its findings of fact and conclusions of law.
Fed. R. Bankr. P. 7052, 9014.
DISCUSSION AND DISPOSITION
A. 	The prefiling credit counseling requirement
Section 109(h)(1) establishes, as a condition of eligibility for any
individual7 to file a petition for bankruptcy relief under any chapter of Title 11,
that he or she (or, in § 302(a) joint cases, they) have received an individual or
group briefing from an approved nonprofit budget and credit counseling agency
within 180 days preceding their petition. Section 109(h)(1)’s new threshold
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8 Section 521(b) states:
(b) 	In addition to the requirements under subsection (a), a debtor who is an
individual shall file with the court –
(1) 	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
(2) 	a copy of the debt repayment plan, if any, developed under section
109(h) 	through 	the 	approved 	nonprofit 	budget 	and 	credit
counseling agency referred to in paragraph (1).
9 Amendments to the Federal Rules of Bankruptcy Procedure necessary to meet the
requirements imposed by BAPCPA are addressed through nationally uniform “Interim Rules.”
Those Interim Rules were adopted by this Court under General Order 199 (Oct. 17, 2005).
Interim Rule 1007(b)(3) states “Unless the United States trustee has determined that the credit
counseling requirement of § 109 does not apply in the district, an individual debtor must file the
certificate and debt repayment plan, if any, required by § 521(b), a certification under
§ 109(h)(3), or a request for a determination by the court under § 109(h)(4).” Under Interim Rule
1007(c), this agency certificate, or the request for an exception or an exemption under § 109(h)(3)
or (4), must be filed “with the petition” (and not, like other matters addressed in Rule 1007(c),
within 15 days of the petition). Additionally, a debtor must assert either his compliance or his
request for exemption by checking the appropriate box on the face of the second page of the
petition, Official Form 1, as quoted earlier in the text of this Decision.
MEMORANDUM OF DECISION - 8
requirement for obtaining bankruptcy relief is mandatory and clear (i.e., “an
individual may not be a debtor unless . . ..”).
Individual debtors prove that they satisfied the counseling requirement and
are eligible for bankruptcy relief by filing the credit counseling agency’s
“certificate” showing that they in fact received the prebankruptcy counseling or
briefing within the preceding 180 days and also filing, if generated in such
counseling, any debt repayment plan. See § 521(b).8 Under the Rules, a debtor is
to file this agency “certificate” with his petition.9
B. 	The requirement does not apply where approved counseling is
not available
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10 Section 109(h)(2) states:
(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 then 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.
MEMORANDUM OF DECISION - 9
Under § 109(h)(2), the credit counseling requirement does not apply in any
district where the U.S. Trustee has determined that the approved nonprofit budget
and credit counseling agencies are not reasonably able to provide adequate
services.10 In the District of Idaho, the U.S. Trustee has not made this
§ 109(h)(2)(A) determination. In fact, the U.S. Trustee has approved multiple
agencies. See http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm#ID
(listing approved agencies in this District); see also § 111(a)(1) (requiring the
Clerk to maintain a publically available list of such agencies), and this Court’s
Website at www.id.uscourts.gov/BK_Reform/BKReformAct2005.htm (linking the
U.S. Trustee’s Website and list of approved agencies).
Thus, the refuge of § 109(h)(2)(A) is not available in this District.
C. 	Statutory exceptions, for some debtors, from the counseling
requirement
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11 Section 109(h)(4) states in full:
(h)(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 these
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).
12 Unlike the “certification” issue under § 109(h)(3) discussed in today’s decision,
§ 109(h)(4) does not address expressly or by inference the procedure to be used to bring the
question of § 109(h)(4) exceptions or exclusions before the Court. However, it is clear that the
burden rests on the debtor to make a prima facie factual showing that one of the excluding factors
– of incapacity, disability or active combat-zone military service – exists. This strongly suggests
use of a verified motion, supporting affidavit or certification if relief under § 109(h)(4) is sought.
Interim Rules 1007(b)(3) and (c) make it incumbent on debtors or their counsel to make such
submissions with the petition and actively pursue a Court ruling. However, the phrase used in
§ 109(h)(4) (“after notice and hearing”) does not make an actual hearing required in all
circumstances. See § 102(1).
13 Section 109(h)(3) states:
(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):
(continued...)
MEMORANDUM OF DECISION - 10
Under § 109(h)(4), the credit counseling requirement does not apply to a
debtor if the Court determines that debtor was unable to complete the requirement
because of “incapacity, disability, or active military duty in a military combat
zone.”11 This determination comes “after notice and hearing.”12
This exception or exclusion is not urged in the present case.
D. 	Exemptions of limited duration from the counseling requirement
Section 109(h)(3)13 allows for an “exemption” from the credit counseling
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13
(...continued)
(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 the 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.
14 Section 109(h)(3)(A)(i) uses the term “waiver” while § 109(h)(3)(B) characterizes the
result of a successful § 109(h)(3)(A) showing as an “exemption.” Like much of BAPCPA, it is
hard to tell whether terminology is used with active intention or sloppy inattention. “Waiver” is
generally viewed as a voluntary relinquishment of a known right or advantage. See Black’s Law
Dictionary 1611 (8th ed. 2004). On the other hand, an “exemption” is a “freedom from a duty,
liability, or requirement.” Id. at 612. It may be that “waiver” is used in a generic, nonlegal sense
to indicate that the “exemption” is of limited duration. See, e.g., Webster’s New Twentieth Cent.
Dictionary 2055 (2nd. ed.) (alternate definition of “waive” as “to put off until later; to postpone;
to defer”). The Court concludes, given the overall structure of the § 109(h) amendments, that it
will use the term “exemption” noting that § 109(h)(3)(B) addresses the duration of that
exemption. For emphasis, the Court will at times use the phrase “temporary exemption.” Accord
In re Hubbard, 332 B.R. 285, 288 (Bankr. S.D. Tex. 2005) (also using phrase “temporary
exemption”).
15 It is important to note that the Court is not today addressing a situation where a debtor
got the prebankruptcy counseling and simply lacks the agency’s certificate of completion he
needs to file under § 521(b)(1) and Interim Rule 1007(b)(3). While that certificate is to be filed
with the petition, see Interim Rule 1007(c), it is conceivable that in rare circumstances a debtor
might need to seek an extension of time for its physical filing. Such a request does not appear to
be foreclosed assuming adequate cause can be shown. See Interim Rule 9006(b)(1) to (b)(3). But
see In re Sukmungsa, No. 05-80029, 2005 WL 3160607 (Bankr. D. Utah Nov. 23, 2005).
MEMORANDUM OF DECISION - 11
requirement.14 Section 109(h)(3) addresses both the procedural process and the
substantive requirements to obtain this temporary exemption.15
1. 	A “certification” is required
Under the express language of § 109(h)(3)(A), the debtor “submits to the
court a certification” in order to seek the exemption. Id. (emphasis added).
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16 The Court appreciates that when a party or counsel signs a motion, that signer “is
certifying” the allegations have evidentiary support and legal merit. See Fed. R. Bankr. P.
9011(b)(3). However, the Court concludes the language used in § 109(h)(3)(A) requires more
than the implicit certifying effect of Rule 9011.
17 The Rules do speak to “verified” statements and pleadings. See, e.g., Fed. R. Bankr. P.
1007(f) (regarding “verified statement” of social security number), Fed. R. Bank. P. 1008
(verification of petitions, schedules and statements); Fed. R. Bankr. P. 9011(e) (noting general
lack of requirement of verification). That “verification” and “certification” might be treated as
synonymous, even though not specifically so stated in the Rules, flows from 28 U.S.C. § 1746
discussed below.
MEMORANDUM OF DECISION - 12
Generally, a request for an order is made by “motion.” See Fed. R. Bankr. P.
9013. However, the Court cannot conclude that § 109(h)(3)(A) authorizes the use
of a simple motion, signed only by counsel, making allegations about the possible
claim to an exemption from the § 109(h)(1) requirements. See, e.g., Debtors’
Request, Doc. No. 6. There would be no reason for Congress to specifically
require a certification if it intended a garden-variety motion signed by counsel to
suffice.16
What is contemplated by the statute’s use of the term “certification” is not
immediately clear. It is not a defined term in the Code, see § 101, or in the
Rules. 17 For interpretive help, the Court looks to Congress’ use of the term
“certification” in another BAPCPA amendment.
Under § 524(k)(5), a reaffirmation agreement must be accompanied by a
prescribed form of “Certification by Debtor’s Attorney (If Any)” in which such
attorney is required to state “I hereby certify that” the agreement meets certain
standards. Those same standards are restated in § 524(c)(3), though there the
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18 If signed with appropriate certifying language, see § 28 U.S.C. § 1746, the title of the
document is of limited significance. As § 523(c)(3) and (k)(5) indicate, Congress uses
certification, declaration and affidavit interchangeably. See also Fed. R. Bankr. P. 1001 (the
Rules are to be construed to secure the just, speedy and inexpensive determination of cases and
proceedings); EIE Guam Corp. v. Long Term Credit Bank of Japan, Ltd., 322 F.3d 635, 643 (9th
Cir. 2003) (warning against and refusing to “exalt form over substance”).
19 Other decisions construing the certification requirement of § 109(h)(3) are in general
(continued...)
MEMORANDUM OF DECISION - 13
attorney’s required submission is called “a declaration or an affidavit” rather than
a certification. Affidavits and declarations are signed by parties with personal
knowledge and provide a means for proof of facts, a step beyond that of mere
allegation as in a motion. See, e.g., Fed. R. Civ. P. 56(e), incorporated by Fed. R.
Bankr. P. 7056 (addressing form of affidavits).
Additionally, 28 U.S.C. § 1746 states in part:
Whenever, under any law of the United States . . . any matter is
required or permitted to be supported, evidenced, established or proved
by the sworn declaration, verification, certificate, . . . [the following
form may be used]:
. . .
(2) 	If executed within the United States, its territories,
possessions or commonwealths: “I declare (or certify, verify or state)
under penalty of perjury that the foregoing is true and correct.
Executed on (date).”
28 U.S.C. § 1746 (emphasis added).
The Court therefore concludes that a request for an order under § 109(h)(3)
must be “certified” by debtors personally in a form consistent with 28 U.S.C.
§ 1746(2), even if they are represented by an attorney.18 In this way, they verify
and certify the facts that they wish the Court to consider under § 109(h)(3)(A). 19
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19
(...continued)
accord with what the term requires, or at least what does not measure up. See, e.g., In re Cleaver,
No. 05-46572, 2005 WL 3099686, at *3-4 (Bankr. S.D. Ohio Nov. 17, 2005); In re Hubbard, No.
05-95017, 2005 WL 3061939, at *2-3 (Bankr. S.D. Tex. Nov. 8, 2005) (decision on
reconsideration regarding § 109(h)(2)); In re Hubbard, 332 B.R. 285, 289 (Bankr. S.D. Tex.
2005); In re LaPorta, 332 B.R. 879, 881-82 (Bankr. D. Minn. 2005).
MEMORANDUM OF DECISION - 14
2. 	What the certification must establish
Section 109(h)(3)(A) establishes three separate requirements for a
temporary exemption from the requirement of § 109(h)(1). They are listed in a
conjunctive, rather than disjunctive, fashion. A debtor must therefore satisfy each
of the three elements in § 109(h)(3)(A)(i), (ii) and (iii) in order to obtain a
temporary exemption. See In re Cleaver, 2005 WL 3099686, at *4; In re Watson,
332 B.R. 740, 745 (Bankr. E.D. Va. 2005); Hubbard, 332 B.R. at 289 (citing Feist
Publ’n, Inc. v. Rural Tel. Serv. Co., Inc., 499 U.S. 340, 357 (1991)); LaPorta, 332
B.R. at 881-82; In re Gee, 332 B.R. 602, 604 (Bankr. W.D. Mo. 2005).
a. 	Presence of exigent circumstances
A debtor must “describe” the “exigent circumstances” that debtor contends
merit an exemption. See § 109(h)(3)(A)(i). Exigent has been defined as
“[r]equiring immediate action or aid; urgent,” and exigent circumstances are
defined as “[a] situation that demands unusual or immediate action and that may
allow people to circumvent usual procedures, as when a neighbor breaks through a
window of a burning house to save someone inside.” See Black’s Law Dictionary
260, 614 (8th ed. 2004).
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20 The question of exigent circumstances is discussed further below in connection with
Debtors’ Certifications.
MEMORANDUM OF DECISION - 15
In the context of a bankruptcy filing without the requisite credit counseling,
the circumstances presented obviously have to relate in some way to the urgency
and need to file. And they must establish something sufficiently different from or
more pressing than the usual or typical motivations to file bankruptcy so as to
justify dispensing with the requirement of prefiling counseling. That is to say, the
described and certified facts must show what makes this debtor different from all
the others who are expected to comply with § 109(h)(1).
The circumstances will vary depending on the debtor, and the inquiry is
highly fact specific. The key is that the factual circumstances proffered must be
relevant and to the statutory point, must be specifically described, and must be
certified by the debtor.20
b. 	Debtor requested, but was unable to obtain,
counseling within five days
Subsection (ii) requires that the debtor’s certification state:
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 [§ 109(h)(1)] during the 5-day period
beginning on the date on which the debtor made that request[.]
§ 109(h)(3)(A)(ii).
It thus appears the certification must affirmatively state two things: first,
that a request for counseling was made by debtors prior to filing; second, that the
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21 Debtors argue that nothing in § 109(h) indicates that the request for counseling be
made prior to the petition date. See Doc. No. 25 at 4. The Court concludes they are mistaken.
Credit counseling is now an “eligibility” requirement. It is patently a prebankruptcy event. The
provisions of § 109(h)(1) and § 521(b)(1), as implemented further by the Interim Rules as
discussed above, require disclosure at the time of the petition that a debtor has qualified. Further,
the certification needed for a § 109(h)(3)(A) temporary exemption, also to be filed with the
petition, requires an affirmative statement verifying the fact that the debtor made the request. See
§ 109(h)(3)(A)(ii) (“states that the debtor requested credit counseling services”). See also In re
LaPorta, 332 B.R. at 883 (“[A] post-petition consultation may be done only by leave of the court.
That ‘leave’ is to be granted only for a bankruptcy filing that is prompted by ‘exigent
circumstances.’ Further, it is to be granted only to debtors who actually tried to obtain the
counseling pre-petition, via an actual request to a credit counseling agency but who were unable
to get the counseling service promptly enough against the backdrop of the ‘exigent
circumstances.’”) (emphasis added).
22 Accord Cleaver, 2005 WL 3099686 at *4 (“‘Normally, the certification should 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.’” (quoting Hubbard, 332 B.R. at 289)).
MEMORANDUM OF DECISION - 16
counseling could not be provided within five days of that request.
The first is relatively easy to evaluate – either the debtor did, or did not,
request credit counseling prior to filing bankruptcy.21 An appropriate certification
of the debtor will establish the fact that the request was made, of whom (i.e.,
which agency), when, and how.22 The second “five day period” requirement also
seems clear: were the debtors advised, in response to their request, that the credit
counseling services could not be provided within five days of the request?
To Debtors, this second requirement is problematic and unworkable. For
example, they fear this requirement might eliminate the possibility of being able to
file immediately after making an actual request for counseling regardless of the
“exigency” of the circumstances, because the statute could be viewed as imposing
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23 Debtors also argue that a counseling session would have been of little use to them,
given the nature of their debts and the balance of their circumstances. They point to several
aspects of § 111, such as § 111(c)(2)(E), and argue that the function to be served by counseling is
not relevant to them or to similarly situated debtors. They thus urge the Court to refuse to require
compliance with the “absurd” requirement of § 109(h)(3)(A)(ii). See Doc. No. 25 at 3-4. The
argument is unavailing. In § 109(h)(3), Congress did not grant debtors the right to seek, nor the
bankruptcy courts the right to grant, an exemption because the mandatory counseling would be of
little or no benefit.
24 Of course, even if he meets § 109(h)(3)(A)(ii) in this fashion, he must still meet the
requirements of § 109(h)(3)(A)(i) and (iii) as well.
MEMORANDUM OF DECISION - 17
a mandatory five-day waiting period before filing. See Doc. No. 25 at 4-7. 23
The Court must, of course, evaluate the language Congress used, and
consider its “plain meaning.” United States v. Ron Pair Enters., Inc., 489 U.S.
235 (1989), states “[t]he plain meaning of legislation should be conclusive, except
in the ‘rare case [in which] the literal application of a statute will produce a result
demonstrably at odds with the intentions of its drafters.’” Id. at 242; see also
Lamie v. United States, 540 U.S. 526, 534-36 (2004).
Reading – plainly – the two components of § 109(h)(3)(A)(ii) together, a
debtor may seek an exemption if he certifies that (a) he made the request for
counseling prior to the filing of his petition and (b) the counseling agency to
whom he made that request advised it could not accommodate his request and hold
the counseling session within five days. In such a situation, there would be no
“waiting period.”24
However, if a prospective debtor makes the counseling request and is
advised that the request can be accommodated within five days, it appears he
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25 See Cleaver, 2005 WL 3099686 at *5 (noting, but not reaching, this issue).
26 See Doc. No. 25 at 6 (“If circumstances are exigent, then one would not require
waiting another 5 days. . . . [T]he court should strike section 109(h)(3)(A)(ii) in its entirety. The
remaining sub-sections (i) and (iii) are sufficient to effectuate the intent of congress.”)
27 Duncan v. Walker, 533 U.S. 167, 174 (2001) (noting that it is the court’s duty to “give
effect, if possible, to every clause and word of a statute” (internal quotations omitted));
Kawaauhau v. Geiger, 523 U.S. 57, 62 (1998) (quoting Mackey v. Lanier Collection Agency &
Serv., Inc., 486 U.S. 825, 837 (1988) and noting that the Supreme Court “is hesitant to adopt an
(continued...)
MEMORANDUM OF DECISION - 18
could never make the precise certification specifically required under
§ 109(h)(3)(A)(ii) even if he felt there were sufficiently exigent circumstances to
support an immediate bankruptcy filing, i.e., before the counseling is held. In that
case, the debtor would appear to be required to delay the filing, notwithstanding
what he feels are good reasons to file within that five-day period. 25
This may seem, and in fact it might be, a harsh standard. However, that the
BAPCPA amendments “may produce an unpopular and perhaps even burdensome
result” does not require the Court to fashion a judicial remedy; instead “the proper
venue . . . lies with Congress.” Watson, 332 B.R. at 745; see also LaPorta, 332
B.R. at 883-84.
Debtor asks the Court to hold that exigencies advanced under
§ 109(h)(3)(A)(i) are capable of overriding the five day requirement of
§ 109(h)(3)(A)(ii), and to “strike” the latter requirement.26 The Court, however, is
strongly cautioned against construing statutes in a way that renders any portion
thereof a nullity. 27 It will therefore decline Debtors’ invitation.
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27
(...continued)
interpretation of a congressional enactment which renders superfluous another portion of that
same law”); United States v. Handy, 761 F.2d 1279, 1280 (9th Cir. 1985) (“A statute should be
construed so as to avoid making any word superfluous.”). Accord Cleaver, 2005 WL 3099686 at
*4-5 (noting that exigent circumstances were shown but denying waiver for a failure to establish
compliance with § 109(h)(3)(A)(ii)); Gee, 332 B.R. at 604 (same).
28 Debtors also attack the constitutionality of § 109(h)(3)(A)(ii). See Doc. No. 25 at 4-5.
The constitutional challenge is not adequately presented or briefed, and the Court will not
entertain it. See also Watson, 332 B.R. at 746-47 (rejecting constitutional arguments regarding
§ 109(h)).
29 Section 109(h)(3)(A) says that the requirements of § 109(h)(1) “shall not apply” with
(continued...)
MEMORANDUM OF DECISION - 19
This Court thus concludes that debtors seeking an exemption under
§ 109(h)(3)(A) must not only allege but also certify, in order to comply with
§ 109(h)(3)(A)(ii), that (a) they made a request for counseling prior to filing and
(b) the agency could not accommodate the request and provide such counseling
within five days of the request. 28
If that certification, in conjunction with the exigent circumstances needed
to meet § 109(h)(3)(A)(i), satisfies the Court as required under § 109(h)(3)(A)(iii),
then an exemption of limited duration is provided within which the debtors can get
the counseling and comply with § 109(h)(1) and § 521(b)(1).
However, if no such § 109(h)(3)(A)(ii) certification is made, one of the
required elements is lacking and the request must be denied.
c. 	Satisfactory to the court
Finally, a debtor’s submissions must be “satisfactory to the court.” See
§ 109(h)(3)(A)(iii). This certainly implicates judicial discretion.29 Of course, it
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29
(...continued)
respect to a debtor meeting the three requirements. Ordinarily, the use of the term “shall”
indicates a mandatory nature while the use of the term “may” connotes discretion. See Jama v.
Immigration & Customs Enforcement, 543 U.S. 335, 125 S.Ct. 694, 703 (2005); Haig v. Agee,
453 U.S. 280, 294 n.26 (1981). Here, the inclusion of the third element, that the certification is
satisfactory to the court, essentially converts the mandatory “shall” of § 109(h)(3)(A) into “may.”
MEMORANDUM OF DECISION - 20
also raises the possibility of less than fully uniform treatment as between districts
or even within a given district, as what is satisfactory to one judge might not
satisfy another.
Nothing, as yet, tells the bankruptcy courts what should guide their
discretion or satisfy them. The key, almost certainly, will be the specific factual
circumstances described in the certification. If not sufficiently exigent and
compelling, the certification will not be satisfactory to the court, and the
temporary exemption will not be authorized.
E. 	Application of the foregoing standards to the Request and the
Certifications
With this discussion and these standards in mind, the Court must determine
if Debtors have properly sought and justified a temporary exemption from the
requirement of pre-bankruptcy credit counseling.
1. 	The Request
Debtors’ initial Request herein was procedurally flawed. There was no
“certification” or any similar or equivalent process. The allegations of their
counsel were not enough. However, Debtors were given an opportunity, at
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30 As this was a matter of first impression, allowing Debtors to remedy the inadequate
submissions was appropriate. But, in future cases, debtors and their counsel are cautioned that
such leave may not be provided. It is a debtor’s burden to file appropriate certifications at the
outset.
MEMORANDUM OF DECISION - 21
hearing, to resubmit their Request in a proper form.30 They did so with the First
and Second Certifications.
2. 	The Certifications
Debtors’ First Certifications were terse and conclusory. The “exigent
circumstances” were addressed only obliquely in the first paragraph, and Debtors
simply parroted the statutory language of § 109(h)(3)(A)(ii) in the following two
paragraphs. See Doc. No. 21 (quoted above). While they were signed and
certified, these First Certifications were deficient in providing any detail of
pertinent facts. Accord Hubbard, 2005 WL 3061939, at *2 n.2 (noting, in regard
to what would be “satisfactory” under § 109(h)(3)(A)(iii) that a “conclusory
allegation that the debtor is unable to obtain credit counseling services is less
sufficient than an allegation that gives the dates and times of attempts to obtain the
services and the reasons (if known) why the attempts were unsuccessful”). This
Court concludes that a boiler-plate allegation, merely reciting the statutory
language, is inadequate under both subsections (ii) and (iii), even if that allegation
is certified.
Further, Debtors’ Second Certification does not prove compliance with the
requirements of § 109(h)(3)(A)(ii). Closely read, the facts certified in the Second
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31 Debtors abandoned their contact with this agency and, post-petition, started talking
with a third credit counseling agency.
MEMORANDUM OF DECISION - 22
Certification do not establish both prongs of that element. Even if Debtors “made
a request” of the second agency discussed in the Second Certification, there is
nothing indicating any response from this agency advising Debtors that the
counseling could not be provided within five days. It appears that this agency’s
employee to whom counsel spoke could provide Debtors no information at all, and
indicated only that someone else would later make a return call to advise whether
and when counseling might occur. Debtors opted to file without paying this
second agency and without waiting for a response from it as to when counseling
could be provided.31
The Court also concludes the requirements of § 109(h)(3)(A)(i) and (iii)
were not met. The circumstances were not clearly exigent, and they do not satisfy
the Court.
The court in Cleaver notes:
[T]he common reality is that many debtors file at the last minute just
before a foreclosure sale or the loss of their money or possessions to
creditors. 	Furthermore, it is difficult to conceive of any exigent
circumstances related to bankruptcy that would not involve impending
creditor action. 	Absent some sort of immediate collection activity,
there is no urgency affecting the timing of a bankruptcy filing.
Consequently, the immediacy of the foreclosure sale in this case
appears to be exactly the sort of exigent circumstance contemplated by
the statute.
2005 WL 3099686 at *4. In a footnote to this passage, the court observed:
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32 Cleaver further commented, that “[t]he typical brinkmanship attributable to such
exigent circumstances may be considerably curtailed by the second certification requirement [of
§ 109(h)(3)(A)(ii)].” Id. at *5.
33 In Idaho, a debtor is entitled to notice of default under Idaho Code § 45-1505 and 120
days notice of a scheduled sale on a deed of trust. See Idaho Code § 45-1506.
34 Post-judgment executions by levy and sale require varying notice periods depending
on the type of asset at issue. See Idaho Code § 11-302. And, the Idaho Code establishes several
requirements to effectuate a garnishment, including a 14 day notice period in which a debtor may
(continued...)
MEMORANDUM OF DECISION - 23
Bankruptcy is frequently a last resort because many debtors
attempt to repay their creditors and avoid the stigma associated with a
bankruptcy filing for as long as possible. As a matter of policy, that
seems appropriate and in accord with the general tenor of BAPCPA,
but, as discussed later in this decision, the newly amended statute also
penalizes those debtors who wait until the penultimate hour or the “eve
of foreclosure” to file their bankruptcy petitions.
Id. at n.6.32
This Court concurs, in general, with the observations in Cleaver about what
might be exigent. It is hard to imagine an exigent circumstance sufficient to
motivate an immediate bankruptcy filing that does not concern creditor collection
activity of some sort. Still, virtually every bankruptcy has such factors looming in
the background somewhere. Congress did not, in § 109(h), grant each and every
debtor a pass on the counseling requirement due to an impending foreclosure,
garnishment, trial or other filing motivator. It is clear enough that § 109(h)(3)(A)
exemptions are intended to be the exception, not the rule.
Foreclosures do not come without a good deal of advance notice. 33 To a
lesser degree, neither do garnishments or executions on judgments.34 Impending
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34
(...continued)
claim an exemption. See Idaho Code § 8-507 et. seq.
MEMORANDUM OF DECISION - 24
trial dates and other similar motivators also do not spring up overnight.
Nonbankruptcy law has myriad procedural protections for debtors, providing
advance notice of what might occur and when. Waiting, therefore, until the eve of
creditor action before addressing the § 109(h) prerequisite for filing bankruptcy
makes the exigency rather self-inflicted.
Thus, a debtor’s certification should forthrightly address the extent of his or
her knowledge of the credit counseling requirement; the contacts if any with
lawyers, petition preparers or others providing advice, and whether such advice
included information regarding the counseling requirement; and the nature and
timing of the event(s) that create the exigency for filing.
In the present case, the factors on exigency are rather mixed. According to
the additional facts set forth in the Second Certification, Debtors knew, in early
October, that the bankruptcy laws were changing. After being garnished, they
consulted with counsel (ultimately the attorney they retained for this filing) on
October 5. Then, after suffering two more garnishments, they returned to counsel
for a bankruptcy filing. In talking with him by phone on November 1, they
specifically discussed the credit counseling requirement. They went to Counsel’s
office on November 2 to prepare the bankruptcy filing and to make arrangements
to satisfy the counseling requirement.
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35 Idaho law provides for “continuing garnishments” effective on a debtor’s wages until
released or satisfied. See Idaho Code § 8-509. The details of the garnishment were not provided
here, but Debtors’ knowledge of the repeating nature of the garnishments and the paydays on
which they would occur strongly suggests a continuing garnishment was in place. It also appears
that counsel was alerted in early October to the ongoing nature of the collection activity. See
Second Certification at 1 (noting a garnishment preceded the first consultation with counsel on
October 5).
36 Without extensive discussion, the Court acknowledges there are countervailing facts,
such as Debtor Rodriguez’s loss of employment; but ultimately, the Court cannot conclude that
exigent circumstances were clearly shown.
MEMORANDUM OF DECISION - 25
Garnishment, as noted, may be an exigent circumstance. However, while
the impending garnishment was certainly a matter of concern, Debtors had gone
through two garnishments in October after having first consulted with counsel and
before returning on November 1 to follow up on a bankruptcy filing.35 That the
anticipated November 3 garnishment was so critical as to qualify in this case as an
exigent circumstance was not clearly shown.36
But even if circumstances were conceptually exigent within the
contemplation of the statute, the certification does not adequately explain or
justify Debtors waiting until November 2 to address the statutorily prescribed
eligibility condition. Debtors met with counsel a month earlier. They were aware
that changes in the bankruptcy process were coming. They thought they would
file before those changes became effective (i.e., before October 17), but lacked the
funds. By October 18 Debtors knew that any possible filing would have to be
under the new Code regime. Some time therefore existed to meet the credit
counseling requirement. That Debtors waited until November 1 to face the issue
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37 “If Congress enacted into law something different from what it intended, then it should
amend the statute to conform it to its intent. ‘It is beyond our province to rescue Congress from
its drafting errors, and to provide for what we might think . . . is the preferred result.’ United
States v. Granderson, 511 U.S. 39, 68, 114 S.Ct. 1259, 127 L.Ed.2d 611 (1994) (concurring
opinion). This allows both of our branches to adhere to our respected, and respective,
constitutional roles. In the meantime, we must determine intent from the statute before us.”
Lamie, 540 U.S. at 542.
MEMORANDUM OF DECISION - 26
is a problem. This is especially true since here, unlike the situation in other cases
recently presented to the Court under § 109(h)(3)(A), these Debtors had the
benefit of talking to counsel well in advance of filing, had some awareness of the
changes in bankruptcy laws scheduled for mid-October, and had time to face those
challenges.
Ultimately, the submissions are not satisfactory to the Court.
CONCLUSION
This case presents difficult issues. The Court appreciates that efforts were
made by Debtors and their counsel to meet the new, more burdensome
requirements imposed by BAPCPA. But the Court cannot ignore those
requirements, nor can it modify them.
The law is what it is. The Court is obligated to enforce it as written. Lamie
instructs that it is not a court’s proper function to re-draft the statute, or to
“improve” it through interpretation, even if the Code’s language is “awkward” or
“ungrammatical” so long as it is not ambiguous or does not lead to absurdities. 37
Interpreting § 109(h)(3)(A) to mean what it says does not lead to ambiguity or
necessarily absurd results, even though the consequences are serious.
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38 On December 5, Debtors filed signed statements alleging that they completed the
counseling on December 2. See Doc. Nos. 28, 29. These statements, even if the temporary
exemption had been granted, would not be adequate or acceptable. It is the agency’s certificate of
completion that a debtor must file to meet the requirements of the Code. See § 521(b)(1). On
December 6, Debtors filed the agency certificates. See Doc. No. 30. They indicate counseling
occurred on December 2. This would have been within the 30 day window addressed in
§ 109(h)(3)(B) if the exemption had been authorized. But since the exemption is not granted,
Debtors lack eligibility and dismissal is required. See, e.g., LaPorta, 332 B.R. at 883-84 (“A lack
of statutory eligibility to ‘be a debtor,’ if it goes to a default on the part of the debtor that is
incapable of cure under the very terms of the Code, is the very most fundamental ‘cause’ for
dismissal [under § 707(a)].”).
MEMORANDUM OF DECISION - 27
One of the clearer commands under BAPCPA is that individuals – with
only very limited exceptions or possible temporary exemptions – must undergo
credit counseling or briefing prior to filing for bankruptcy relief. The utility of the
counseling may be debatable in some cases, but the requirement that it be obtained
is not. An overly liberal approach to granting exemptions under § 109(h)(3)(A)
would vitiate the evident Congressional intent that almost all individuals must
undergo the counseling before, and as a precondition to, filing bankruptcy.
Debtors did not establish in their Certifications that they met each of the
three elements necessary under § 109(h)(3)(A)(i), (ii) and (iii) to obtain a
temporary exemption. Their Request and Certifications will therefore be denied.
Because the eligibility requirement of § 109(h)(1) was not met, and because
Debtors have failed to justify an exemption under § 109(h)(3)(A), the case must be
dismissed.38
The Court will prepare and enter an appropriate order.
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MEMORANDUM OF DECISION - 28
DATED: December 9, 2005
TERRY L. MYERS
CHIEF U. S. BANKRUPTCY JUDGE
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