Obtain Exemption from Pre-Petition Creditor Counseling

Minnesota Bankruptcy Case: Debtor Must Demonstrate Exigent Circumstances to Obtain Exemption from Pre-Petition Creditor Counseling

The following is a summary of a Minnesota bankruptcy case or a case relevant to Minnesota bankruptcy law.

Minnesota Bankruptcy Case:

Duncan v. LaBarge (In re Duncan), 418 B.R. 278 (B.A.P. 8th Cir. (Mo.) 11/5/09) (Kressel, C.J.).

Case Summary:

Debtor Must Demonstrate Exigent Circumstances to Obtain Exemption from Pre-Petition Creditor Counseling

The Eighth Circuit BAP affirms the bankruptcy court’s dismissal of the Chapter 13 case where the debtors moved for exemption from credit counseling without providing any evidence regarding exigent circumstances. The debtors filed a Chapter 13 with a “motion for exemption from creditor counseling” that provided no facts to support their request. They completed the counseling post-filing. The court denied the motion, and in their motion to reconsider, the debtors again provided no basis for the request. The court denied that motion. In their appeal documents, for the first time, the debtors explained the exigent circumstances. The BAP affirms the bankruptcy court’s dismissal, finding that debtors were not qualified to be debtors under § 109(h). To be a debtor, an individual must file a credit counseling certificate. None of the three exceptions to this rule apply to the debtors. There are programs available, and the debtors are not disabled from completing a program. The third exception, for exigent circumstances, does not apply because the debtors failed to provide the court with a certificate that described the exigent circumstances and that was satisfactory to the court. The BAP declined to consider facts presented on appeal but not to the bankruptcy court.

Credit: The preceding was a summary of a case relevant to Minnesota bankruptcy law. The case summary was prepared by the U.S. Bankruptcy Court through Judge Robert J. Kressel & attorney Faye Knowles.