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Opinion 486

Case Name: 

In re Sukmungsa, 2005 WL 3160607

Judge: 
Judge Boulden
Date: 
Nov-23-2005
Case Number(s): 
05-80029
Status: 

PUBLISHED

Body: 

Section 109(h) of the Bankruptcy Code, as enacted by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, provides that individual debtors must either complete a briefing from an approved nonprofit budget and credit counseling agency within 180 days prepetition or request a waiver. In accordance with this statutory bar to bankruptcy relief, Local Rule 1007-2(d)(1) requires the Clerk of Court to dismiss a case if a debtor fails to certify compliance with § 109(h) on the petition. The debtors in this case failed to check either box on the petition certifying such compliance, and an Order of Dismissal was entered. The debtors moved to vacate the Order of Dismissal on grounds of excusable neglect under Fed. R. Civ. P. 60(b) and Fed. R. Bankr. P. 9024. The Court conducted an excusable neglect analysis in accordance with the Supreme Court's decision in Pioneer Investment Services Company v. Brunswick Associates Limited Partnership et al. , 507 U.S. 380 (1993), and found that excusable neglect in failing to certify § 109(h) compliance on the petition had not been shown by either the debtors or debtors' counsel. Most importantly, the Court found that the reason for the omission and the concomitant delay were within the reasonable control of the debtors and their counsel. The inconsistent testimony and documentary evidence demonstrated counsel's failure to make reasonable inquiries under Fed. R. Bankr. P. 9011 and established uncertainty as to whether the debtors had even received the prepetition briefing. Although Rule 9011 sanctions were not imposed, the Court did note counsel's obligations under the Rule to make reasonable inquiries into the underlying factual assertions of filed documents.

Internal Ref: 
Opinion 486
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