Appellate Panel Sides with Debtor, Clarifies Credit Counseling Requirement in Chapter 13 Bankruptcies

A recent decision by the United States Bankruptcy Appellate Panel of the Eighth Circuit Court of Appeals rejected a creditor’s attempt to dismiss a Chapter 13 bankruptcy that the debtor proposed and that was confirmed by the bankruptcy court. The appeal in the case of Curtis v. Seagraves was based upon the creditor’s claim that the debtor did not properly prove that she had obtained the required credit counseling before having her petition granted.

money-1588323The creditor argued that the debtor needed to sign a statement that she had obtained credit counseling under penalty of perjury. Instead of doing that, the debtor submitted a standard signature along with a certification from the counseling agency. The appellate panel accepted the debtor’s proof as tendered and ruled that the federal law does not require that the debtor sign a statement that they attended credit counseling under penalty of perjury. As a result of this ruling, the creditor will be unable to have the debtor’s bankruptcy case dismissed.

Credit Counseling and Other Requirements Before Filing for Bankruptcy

The United States Bankruptcy Code contains several requirements and procedures that must be followed in order for a debtor to have the greatest chance of having their petition to discharge their debts approved. One of these is the requirement that debtors attend a credit counseling class or program before the bankruptcy plan is confirmed.

A key purpose of the credit counseling requirement is to remove the misconceptions and unrealistic expectations that many debtors have with bankruptcy in order to streamline the process once the case is before a bankruptcy judge. Although the credit counseling requirement is not an extremely demanding one, a debtor’s failure to comply with all the procedural rules and requirements in accordance with federal law could threaten the confirmation and approval of their bankruptcy proceeding. People considering bankruptcy should seek credible legal advice from a qualified Kentucky or Indiana bankruptcy attorney to ensure that all requirements are met and procedures followed.

Are You Considering Filing for Bankruptcy in Indiana or Kentucky?

If you or a loved one has been considering filing for bankruptcy, the Louisville and Southern Indiana bankruptcy attorneys at the Schwartz Bankruptcy Law Center can help you make a sound decision for your financial future. We represent clients in all types of bankruptcy proceedings, and we can advise you about which type of bankruptcy will be most beneficial for you. Our attorneys will answer your questions about the types of debt that can be discharged in a bankruptcy case, as well as the exemptions that can help you maintain control of your property throughout the process. Contact a qualified bankruptcy attorney today. At the Schwartz Bankruptcy Law Center, we help clients across the country get their finances under control. Call 866-366-3328 to schedule a risk-free consultation or contact us through our website.

More Blog Posts:

Ninth Circuit Affirms Dismissal of Pro-Se Debtor’s Bankruptcy Petition for Failure to Meet Deadline, Kentucky Bankruptcy Lawyers Blog, published August 17, 2015.

How Entrepreneurs Build Successful Businesses After Discharging Debts with Personal Bankruptcy, Kentucky Bankruptcy Lawyers Blog, published October 8, 2015.

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