Bankruptcy Action Can Be ‘Commenced’ Despite Failure to Meet Law’s Requirements, 2nd Circuit Says

Law.com – Bankruptcy Action Can Be ‘Commenced’ Despite Failure to Meet Law’s Requirements, 2nd Circuit Says

A bankruptcy action can be considered “commenced” even when a debtor has failed to meet a requirement imposed by Congress that he first receive credit counseling, the 2nd U.S. Circuit Court of Appeals ruled Thursday.

Interpreting a “statutory tangle” of bankruptcy provisions, the circuit said the counseling requirement under 11 U.S.C. Section 109(h) is not jurisdictional in nature and a case can still be regarded as begun by the filing of a bankruptcy petition, which triggers an automatic stay.

Section 109(h), added to the code by Congress in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, was interpreted by the 2nd Circuit in three separate pro se bankruptcy cases that were on appeal. Adams v. Zarnel, 07-0090-bk, was the lead case.

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