Here in Oklahoma the answer is “Yes you can.” You can file bankruptcy on the same day that you take your credit counseling class. However, if you live in another state, you may be required to wait to file bankruptcy until the day after you complete the credit counseling class.
Why the difference depending on where you live? Well, the new bankruptcy law of 2005 (BAPCPA) brought many changes to the world of consumer bankruptcy. And unfortunately, Congress did a poor job of drafting the new law which has resulted in much confusion. Much of the new bankruptcy law is unclear and subject to differing interpretations. This has resulted in bankruptcy judges having to decide exactly what the new law means. And many times we receive diametrically opposite rulings from different bankruptcy judges on the exact same issue. That is what has happened with the question of whether or not a person can file bankruptcy on the same day he or she completes the credit counseling class.
The credit counseling requirement is a result of the new bankruptcy law of 2005. Previously, a person filing bankruptcy was not required to take a credit counseling course.
11 USC 109(h)(1), which was added to the Bankruptcy Code by the BAPCPA amendments of 2005, provides as follows:
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. (Emphasis added.)
The effort to define “during the 180-day period preceding the date of filing of the petition by such individual” has resulted in two distinct lines of case law.
The first line of cases (“Plain Language”) holds that the phrase “the 180-day period preceding the date of filing” requires that the credit counseling be obtained no later than the calendar day prior to the day on which the petition is filed.
The second line of cases (“Bright Line”) holds that § 109(h)(1) is satisfied so long as the credit counseling precedes the filing of the petition, even if both events occur on the same calendar day.
Here in Oklahoma, we follow the “Bright Line” approach due to the case of In re Francisco, BAP No. NM-08-019. (B.A.P. 10th Cir. 7/2/2008) (B.A.P. 10th Cir., 2008). In this case, the debtor completed the required credit counseling class in the morning and later that same day filed bankruptcy. Shortly thereafter, the bankruptcy judge, sua sponte, issued an Order directing the Debtor to show cause why her case should not be dismissed pursuant to § 109(h)(1). A hearing was held and the bankruptcy judge dismissed the case. The debtor appealed and the appellate court reversed the bankruptcy judge’s decision by holding that a debtor qualifies as a debtor under § 109(h) so long as he or she completes the required credit counseling at any time between 180 days before, and the moment of, filing the petition.
If you have are struggling with debt problems and have questions about how bankruptcy ma be able to help, contact Tulsa bankruptcy lawyer Dan Nunley today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.
