Chapter 13 debtor received required credit counseling within deadline

Although there are a number of bankruptcy options available, for some individuals, a Chapter 13 bankruptcy proceeding may be the best solution. Under Chapter 13, a debtor reorganizes his or her debts and makes a plan to repay them, generally over three to five years.

Anyone opting for bankruptcy has certain requirements they must meet and procedures they must follow, and it is wise to have an attorney guiding you through the process.

For example, two requirements for a Chapter 13 bankruptcy are that the debtor receives credit counseling and completes a personal financial management course.

In the recent United States Bankruptcy Court case of In re Walker, a debtor came very close to running afoul of the requirements.

Last minute credit counseling

On October 29, 2013, the debtor filed for a Chapter 13 bankruptcy. On that same day, the debtor obtained the credit counseling required under the federal bankruptcy law.

The bankruptcy trustee-the person responsible for administering the bankruptcy-argued that receiving the counseling on the very day the petition was filed was untimely because it was not done within the required 180-day period specified under the law, meaning the debtor's petition should be dismissed.

Was the deadline met?

The United States Bankruptcy Court noted that the plain language of the statute clearly stated that a debtor has 180 days to receive credit counseling, and that 180-day period ends on "the date of filing of the petition." The question was whether the actual day of filing was considered part of that 180-day period, or if the counseling needed to be completed prior to the date of filing.

The court explained that "date" is generally defined as the day when an event occurs and other cases had held that when an act is to be done on a particular day, generally the party has that whole day in which to perform the act.

Therefore, the court held that the 180-day period included the date of the filing of the petition. No more specific distinction was contained in the federal law, and thus the court was bound to apply the clear and unambiguous language of the statute. The debtor had managed to receive his credit counseling just within the deadline and his Chapter 13 bankruptcy proceeding could move forward.

Complex procedures and requirements

Bankruptcy proceedings can offer debt relief and a fresh start. However, there are many procedures and requirements which must be met in a timely manner. If you are considering filing for bankruptcy, it is crucial that you seek advice from an experienced bankruptcy attorney who can help you determine which bankruptcy option is right for your situation-and who can also help ensure that you follow all the requirements for a successful bankruptcy filing.