03 Oct Beyond The Bar: Credit Counseling Problems Surface
The bar is the rail that separates the public seating area of the courtroom from the counsel tables. Only persons licensed and admitted to the bar are permitted to cross beyond this rail and appear before the court on behalf of a client.
Lawyers are a talkative bunch. But did you ever hear that you can learn more with your mouth closed than open? I often sit in court after my cases are finished and listen to the remaining issues and arguments on the docket.
Today I learned a couple of things about the credit counseling requirement. In unrelated cases involving different counseling agencies, the Court in one case struck a credit counseling provider from the list of approved providers practicing in this district for failing to provide information regarding a contact person for the agency; and in another case, the court heard allegations that a particular national credit counseling service postdates the certificates of counseling to the date of payment for the service rather than the date of counseling.
I did not know the Court could strike a counseling provider, and sure enough, there it is in section 111, “the district court may…investigate the qualifications of a…counseling agency…and request production of documents to ensure the integrity and effectiveness of such agency.” So, for the time being, the University of Missouri-Columbia Office for Financial Success is out of the SDIL.
Who would have thought a counseling service approved by the US Trustee Program would issue a certificate of counseling with a date different than the date on which counseling occurred. The idea never occurred to me, and so intrigued the Judge, that he asked the standing trustee to look into the procedure. A debtor must complete credit counseling with an approved service provider during the 180 days preceding filing a bankruptcy case. There is a dispute whether the case can be filed on the same date as counseling. But there is no dispute that counseling must occur before filing. The cases on this docket involved cases where the debtor claimed to have taken counseling before filing, but did not pay for nor obtain the certificate from the provider until sometime after filing the case. In each case, the certificate allegedly bore the date the payment was received, not the date counseling occurred.
Andy Miofsky, Esq.
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