KSB

Judge Karlin

12-40449 Rios (Doc. # 42) - Document Text

SO ORDERED.
SIGNED this 10th day of May, 2012.

 

In the United States Bankruptcy Court
for the District of Kansas

In re: )
)
Gwendolyn Louise Rios, ) Case No. 12-40449

)
Debtor. )
_________________________________)


Memorandum Opinion and Order Denying
Motion for Rehearing


Debtor, Gwendolyn Louise Rios, initiated this bankruptcy proceeding, pro
se, by filing a petition under Chapter 11 of the Bankruptcy Code on March 30,
2012. Contemporaneously with the filing of her petition, Ms. Rios filed a
Certificate of Credit Counseling. It indicated that she had obtained credit
counseling from Housing and Credit Counseling, Inc. on December 11, 2009.1
Because the Certificate of Credit Counseling was issued more than 180 days

1

 Doc. 4.

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prior to the filing of the petition, the United States Trustee filed a Motion to
Dismiss,2 claiming that Ms. Rios had failed to comply with 11 U.S.C. § 109(h)(1).

On April 18, 2012 Ms. Rios objected to the motion to dismiss, claiming that
she had an appointment to obtain the required credit counseling on April 20,
2012.3 She then, on April 20, 2012, filed another Certificate of Counseling with
the Court.4 This Certificate indicates she completed the counseling that same
day.

The motion to dismiss was heard on April 24, 2012, at which time Ms. Rios
appeared and the Court questioned her about the circumstances surrounding the
counseling. Based on Ms. Rios’ responses, the Court concluded that Ms. Rios had
failed to comply with § 109(h)(1) and that the Court had no statutory choice but
to dismiss her petition. An Order of Dismissal was entered on May 2, 2012;5 it
found that Ms. Rios was ineligible to be a debtor pursuant to § 109(h)(1) and
dismissed the case.

On May 9, 2012, Ms. Rios filed a Motion for Rehearing using a “fill-in-theblank”
form that indicates it is being filed pursuant to Rule 8015 of the Federal

2 Doc. 18.
3 Doc. 30.
4 Doc. 34.
5 Doc. 36.


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Rules of Bankruptcy Procedure.6 On that same date, Ms. Rios also filed a Notice
of Appeal,7 seeking to appeal the Court’s order dismissing this case. Because the
matter has not yet been heard by any appellate court, a motion for rehearing
under Rule 8015 is obviously inappropriate.8 But because Ms. Rios is proceeding
pro se, and because her motion was filed within 14 days of the entry of the
Court’s order dismissing her case, the Court will, out of an abundance of caution,
deem the Motion for Rehearing to be a motion to alter or amend this Court’s
prior order pursuant to Fed. R. Bankr. P. 9023.9

The Court retains jurisdiction to rule on the motion for reconsideration;
the notice of appeal will not become ripe until the motion for reconsideration is
resolved.10

I. Analysis
6 Doc. 38.

7 Doc. 39.

8 Fed. R. Bankr. P. 8015 provides a process by which a party may seek a rehearing bythe district court or the bankruptcy appellate panel after that court has issued a ruling on anappeal from the bankruptcy court. It is not a proper mechanism for seeking reconsideration ofan opinion by the bankruptcy court prior to any appeal being heard.

9 See Hatfield v. Board of County Com’rs for Converse County, 52 F.2d 858, 861 (10thCir. 1995) (holding that a “motion for reconsideration” filed within the time limit for filing amotion to alter or amend a judgment under Rule 59 should be deemed to have been filed underthat rule). Fed. R. Civ. P. 59 is made applicable to this proceeding pursuant to Fed. R. Bankr.

P. 9023 except that the motion has to be filed within 14 days from a bankruptcy order.
10 Id. at n. 2.

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Ms. Rios seeks reconsideration of the Court’s dismissal of her case on the
basis that a new credit counseling certificate has now been filed with the Court.
Unfortunately for Ms. Rios, this new certificate cannot save her case because of
the clear language of 11 U.S.C. § 109(h)(1).

According to § 109(h), “an individual may not be a debtor under this title
unless such individual has, during the 180-day period ending on the date of
filing of the petition by such individual, received . . . an individual or group
briefing . . . that outlined the opportunities for available credit counseling and
assisted such individual in performing a related budget analysis.”11 This
subsection makes clear that the 180-day period for obtaining the credit
counseling ends on the date of filing of the petition.12 The initial credit
counseling certificate that Ms. Rios filed was insufficient to qualify her as an
eligible debtor because she attended the counseling session more than 180 days
prior to the filing of the petition. The second credit counseling certificate filed by
Ms. Rios was also insufficient, because the counseling session was taken after
the filing of the petition date—here, 20 days after the petition date.

As the Court explained at the hearing, § 109(h)(3) does provide an
exception to the timing requirements. Under § 109(h)(3), a debtor may be

11 11 U.S.C. § 109(h)(1).

12 See also In re Francisco, 390 B.R. 700, 705 (10th Cir. BAP 2008) (holding that a debtorqualifies as a debtor under § 109(h) “so long as he or she completes the required creditcounseling at any time between 180 days before, and the moment of, filing the petition.)

Case 12-40449 Doc# 42 Filed 05/10/12 Page 4 of 7


excused from obtaining the required credit counseling prior to the filing of the
petition providing the debtor submits to the Court a certification that:

(1)
describes exigent circumstances that merit a waiver of the timingrequirements contained in § 109(h)(1);
(2)
states that the debtor requested credit counseling services from anapproved agency but was unable to obtain the services for at leastone week from the date the debtor made the request; and
(3) is satisfactory to the court.13
As a preliminary matter, Ms. Rios has not filed the required certification under
§ 109(h)(3). Nevertheless, this Court did question Ms. Rios at the April 20, 2012
hearing to determine if she could qualify for a waiver of the timing requirements
under that provision of the Code. Ms. Rios indicated that she had been unsure
if the credit counseling certificate she received in 2009 was sufficient for this
new case, but elected to file it instead of seeking new counseling. She also clearly
stated that she made no request for new credit counseling services from an
approved agency prior to filing this case. She first made the request after
receiving the Trustee’s Motion to Dismiss, which noted the deficiency.
Accordingly, the provisions of § 109(h)(3) do not apply.
The Court next inquired of Ms. Rios whether she could qualify for a waiver
of the credit counseling requirements under § 109(h)(4), which provides for an
exception to the credit counseling requirements if a debtor is unable to complete

13 11 U.S.C. § 109(h)(3).

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the counseling because of “incapacity, disability, or active military duty in a
military combat zone.”14 Ms. Rios indicated she did not qualify for any of these
exceptions, and therefore, the Court found that 11 U.S.C. § 109(h)(4) was
inapplicable as well.

II. Conclusion
The credit counseling requirements found in 11 U.S.C. § 109(h)(1) must be
satisfied within the window of time Congress has unequivocally established,
unless the debtor qualifies for an exception found in § 109(h)(3) or (4). The
congressionally mandated window does not open until 180 days prior to the date
the petition was filed, and closes immediately upon the filing of the petition. Ms.
Rios has submitted two credit counseling certificates in this case. The first
indicates she obtained the counseling well more than 180 days before the filing
of her petition—before the window was opened. The second certificate indicates
the obtained the counseling several weeks after the filing of her petition— after
the window was closed. Because she did not obtain the required credit
counseling within the window of time established by § 109(h)(1), Ms. Rios is
ineligible to be a debtor in this case.

Because the Court correctly granted the Motion to Dismiss, the Court
must deny Ms. Rios’ motion to alter or amend the Court’s prior order dismissing
this case.

14 11 U.S.C. § 109(h)(4).

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It is, therefore, by the Court ordered that the Motion for Rehearing15
is denied.
###

15 Doc. 38.

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