IN RE: YOUNG
Filing
12
MEMORANDUM/OPINION THAT THE BANKRUPTCY COURT DID NOT ABUSE ITS DISCRETION IN DISMISSING YOUNG'S CASE, AND THE BANKRUPTCY COURT'S ORDER IS AFFIRMED. A SEPARATE ORDER FOLLOWS. SIGNED BY HONORABLE JOSEPH F. LEESON, JR ON 3/27/17. 3/28/17 ENTERED AND COPIES MAILED TO PRO SES' AND E-MAILED. (ky, )
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF PENNSYLVANIA
__________________________________________
FEDERAL HOME LOAN MORTGAGE
CORPORATION,
:
:
:
Plaintiff,
:
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v.
:
:
JOHNNY YOUNG,
:
:
Debtor-in-Possession.
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__________________________________________
No. 2:16-cv-04027
OPINION
Affirming Final Order of the Bankruptcy Court of July 6, 2016
Joseph F. Leeson, Jr.
United States District Judge
March 27, 2017
Johnny Young appeals from the bankruptcy court’s dismissal of his chapter 13
bankruptcy petition on July 6, 2016. Because the bankruptcy court did not abuse its discretion in
dismissing Young’s petition for failure to obtain credit counseling prior to filing his petition, the
Court affirms the bankruptcy court’s order.
I.
Background
On June 14, 2016, Johnny Young filed a petition for Chapter 13 bankruptcy. See Petition,
In re Johnny Young, No. 16-14264 (E.D. Bank. Pa. June 14, 2016), ECF No. 1. Young filed his
petition using “Official Form 101,” which is the form approved by the Judicial Conference of the
United States for chapter 13 filings. Question 15 of the Form directs petitioners to “[t]ell the
court whether you have received a briefing about credit counseling” and explains that “[t]he law
requires that [a petitioner] receive a briefing about credit counseling before [filing] for
bankruptcy.” The Form provides several options to answer this question. Young marked the box
indicating that he had “received a briefing from an approved credit counseling agency within the
180 days before [he] filed this bankruptcy petition, but [he did] not have a certificate of
completion.” In these circumstances, the Form states that the petitioner shall file a copy of the
certificate and payment plan, if any, within fourteen days after filing the petition. 1
On the same day that Young filed his petition, the bankruptcy court issued an order
informing Young that his petition was missing certain required documentation, including his
“Certification Concerning Credit Counseling and/or Certificate of Credit Counseling.” Order, In
re Young, ECF No. 5. The court instructed Young to provide this credit counseling
documentation by June 28, 2016, or to apply for an extension of time before that date. On June
28, 2016, Young filed a Certificate of Counseling, certifying that he received credit counseling
on June 27, 2016, which was thirteen days after he filed his petition. Certificate, In re Young,
ECF No. 13. On July 6, 2016, the bankruptcy court dismissed Young’s case because he had
failed to obtain credit counseling before filing his petition. Order, In re Young, ECF No. 24.
Young appeals this order. 2
1
Young also marked, apparently in error, the box “certify[ing] that [he] asked for credit
counseling services from an approved agency, but was unable to obtain those services during the
7 days after [he] made [his] request, and exigent circumstances merit a 30-day temporary waiver
of the requirement.” Young crossed out his mark on this box and initialed this correction. In any
event, the Form instructs that a petitioner seeking a 30-day temporary waiver must “attach a
separate sheet explaining what efforts [he] made to obtain the briefing, why [he was] unable to
obtain it before [he] filed for bankruptcy, and what exigent circumstances required [him] to file
this case.” Young’s petition did not include any such explanation.
2
On November 10, 2016, this Court denied Young’s motions for a stay pending appeal, as
he had not shown a likelihood of success on the merits of his appeal. ECF No. 9. See In re
Blackwell, 162 B.R. 117, 119 (E.D. Pa. 1993) (stating that in order to obtain a stay pending
appeal, a movant must establish, among other things, a strong likelihood of success on the merits
of the appeal).
2
II.
Standard of Review
A district court has jurisdiction to hear appeals from final orders of a bankruptcy court.
28 U.S.C. § 158(a)(1). An order dismissing a chapter 13 case is a final, appealable order. In re
Taal, 504 B.R. 682, 684 (B.A.P. 1st Cir. 2014).
In reviewing an order of the bankruptcy court, a district court applies a clearly erroneous
standard to the bankruptcy court’s findings of fact and a de novo standard to the bankruptcy
court’s legal conclusions. See In re Sharon Steel Corp., 871 F.2d 1217, 1222 (3d Cir. 1989). The
court reviews an order dismissing a chapter 13 case for abuse of discretion. In re Taal, 504 B.R.
at 684; In re Hoshan, No. CIV.A. 07-2931, 2008 WL 81994, at *1 (E.D. Pa. Jan. 7, 2008)
(applying abuse of discretion standard to bankruptcy court’s dismissal of chapter 13 petition for
failure to comply with credit counseling requirements).
III.
Analysis
Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, an
individual debtor filing for bankruptcy under chapter 13 must receive credit counseling from an
approved agency during the 180 days before filing the petition. 11 U.S.C. § 109(h)(1). 3 To
demonstrate compliance with this requirement, a debtor must file with his petition a certificate
identifying the agency, describing the services provided, and including a copy of any debt
repayment plan. Id. § 521(b).
Young did not obtain credit counseling before filing his petition. In view of the fact that
Young evidently obtained counseling after submitting his petition, it appears that he may have
misunderstood the nature of the requirement. Nevertheless, “[t]he law is clear . . . that a debtor
must get credit counseling before filing the bankruptcy petition.” In re Hoshan, 2008 WL 81994,
3
There are several exceptions to this requirement, but they are not applicable in this case.
See 11 U.S.C. § 109(h)(2)-(4).
3
at *3. Accordingly, the bankruptcy court did not abuse its discretion in dismissing Young’s case,
see In re Tomco, 339 B.R. 145 (Bankr. W.D. Pa. 2006) (finding that dismissal is the proper
remedy when a petitioner fails to obtain pre-petition credit counseling), and the bankruptcy
court’s order is affirmed. A separate order follows.
BY THE COURT:
/s/ Joseph F. Leeson, Jr.____________
JOSEPH F. LEESON, JR.
United States District Judge
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