11 U.S.C. §109(h); Eligibility to File; Dismissal
In re Ross, 338 B.R. 134, Case No. 05-86669 (Bankr. N.D. Ga. February 7, 2006) (Bonapfel)
Debtor filed a Chapter 13 petition without first obtaining a credit counseling certificate or showing “exigent circumstances” under §109(h)(3). Therefore, he was ineligible to be a debtor. The question before the court was whether the case should be dismissed or stricken. The distinction was important because it affected the application of the automatic stay should the ineligible debtor file another case. If the petitions of ineligible debtors are stricken and deemed a nullity, a debtor may not be subject to the §362(c)(3) limitation of the stay in a subsequent case. The distinction also affects the actions of creditors, who may be faced with making their own independent determination of whether or not the debtor is eligible under §109(h).
Judge Bonapfel, after a thorough analysis of the Code and case law, held that “eligibility under §109 in general and under §109(h) in particular is not jurisdictional and that, therefore, the filing of a petition by a debtor ineligible to do so nevertheless commences a bankruptcy case that is neither a ‘nullity’ nor void ab initio.” The appropriate remedy, therefore, is to dismiss the case.