Automatic Stay Did Not Protect Putative Debtor who was Determined to be Ineligible to be a Debtor on Filing Date

Automatic Stay Did Not Protect Putative Debtor who was Determined to be Ineligible to be a Debtor on Filing Date

According to the Debtor’s complaint, in 2016, prior to filing her bankruptcy petition, the defendants repossessed the debtor’s vehicle because she had missed a payment. On June 27, 2016, two days after the vehicle was repossessed, the debtor filed her voluntary pro se chapter 13 petition and requested the return of her vehicle, which the defendants refused
to do.

On page 5 of the Debtor’s petition (Part 5, line 15), the Debtor stated that she was not
required to receive credit counseling as required under 11 U.S.C. §109(h) because of a
disability that made her unable to participate in a briefing in person, by phone, or through
the internet after a reasonable attempt to try to do so. Part 5 also includes the following
statement: “If you believe you are not required to receive a briefing about credit
counseling, you must file a motion for waiver of credit counseling with the court.” The
debtor never filed a motion for waiver of credit counseling with the Court.

On December 1, 2016, the Court issued its order to show cause why the debtor’s case
should not be dismissed for failure to file a motion for waiver of credit counseling and
scheduled a hearing on the show cause for January 11, 2017. On January 1, 2017, the
debtor completed her credit counseling and on January 3, 2017, filed her Certificate of
Counseling with the Court. On January 10, 2017, the debtor converted her case to a case
under chapter 7. At the hearing on January 11, counsel for the debtor requested a
continuance so that he could attempt to locate precedential support to allow the case to
proceed in spite of the late-obtained credit counseling. The Court continued the hearing
for one month, until February 8, 2017.

At the hearing on February 8, 2017, counsel for the debtor advised the Court that he wasunable to find any cases in support of his argument that exigent circumstances may, in some instances, allow a case to proceed even after a six-month delay in obtaining credit counseling. Counsel did argue, however, that even if the Court dismissed the case, he believed the Court could retain jurisdiction over the adversary proceeding. The Court agreed that, generally, an alleged violation of the automatic stay does not go away just because the underlying bankruptcy case is dismissed. In its order dismissing the case, the Court retained jurisdiction over the adversary proceeding and scheduled it for trial

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