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To Get Credit Counseling, You Have to Speak the Language

As most people know now, under §109(h) of the BAPCPA Bankruptcy Code, a debtor must obtain a certificate of completion of a credit-counseling course. This requirement can be waived, however, upon motion, if the debtor is

  • physically disabled
  • mentally incapacitated
  • in active military service in a combat zone, or
  • if no adequate, approved credit counseling is offered in their District.

This last exception is the crux of a June 23, 2006 case in the Southern District of Florida, In re: Petit-Louis, where the debtor did not speak English (he spoke Creole), could not get a certified credit counselor that spoke Creole, and could not afford an interpreter. He filed his petition with a letter setting forth his futile efforts to find a Creole-speaking credit counselor.

The court initially concluded that Mr. Petit-Louis's inability to obtain counseling in Creole, combined with the fact that he could not afford to hire a translator, created a barrier to the bankruptcy court that Congress did not intend to create when it mandated that debtors complete a credit counseling course before filing. The U.S. Trustee then filed a motion for reconsideration, arguing that the Bankruptcy Court lacked authority to waive the counseling requirement for Mr. Petit-Louis. In reaffirming its decision, the court provided debtors a second argument for seeking waiver of the pre-filing counseling requirement: if a debtor contends that counseling in his district is inadequate.

The court made two important points in its decision: First, the court had authority to waive Mr. Petit-Louis's counseling requirement under §109(h)(3) (the "Exigent Circumstances Waiver). Second, there is §109(h)(2), which imposes a duty on the US Trustee to decertify a district (thus waiving the counseling requirement) if adequate credit counseling is not reasonably available in the district.

Under BAPCPA, pre-filing counseling is not required for:

"A debtor who resides in a district for which the United States trustee . . . determines that the approved nonprofit budget and credit counseling agencies for such district are not reasonably able to provide adequate services to the additional individuals who would otherwise seek credit counseling from such agencies by reason of the requirement of [section 109(h)] . . ."

In the Petit-Louis case, the court stated that this provision gives the US Trustee the authority to determine whether counseling in a district is adequate. However, a debtor must be afforded a forum to seek review of an "arbitrary and capricious" adequacy determination by the US Trustee, and that the bankruptcy court is the "logical and proper" forum for seeking such review.

This case provides precedent for a debtor who may be unintentionally barred access to the bankruptcy court on account of his lack of English language ability to seek relief in the bankruptcy court. However, the wise course of action would be to file a motion with the petition that puts forth the basis for the requested relief. This puts the US Trustee on notice of the request, giving them the opportunity to reply, and removing an argument for lack of jurisdiction.

Steven J. Richardson
Bankruptcy, Collections, Student Loan, DUI and Traffic Court attorney in Woodbury, NJ.