A bankruptcy filing can occur only after credit counseling. For more of us, it’s a pain in the neck and a burden. But for some people, getting out just isn’t possible.
Seriously. Some New York consumers are in debt and in jail at the same time. And there is nothing in the law that prevents a New York resident from filing for bankruptcy while they’re imprisoned.
But does someone who is in jail need to do their credit counseling before filing for bankruptcy?
That’s what Vernad Alexander wanted to know.
Vernad is an involuntary resident of the Bare Hill Correctional Facility in Malone, New York. He’s been there since July 5, 2006, and his earliest possible release date is July 12, 2012.
On December 16, 2009, without having completed the mandatory pre-bankruptcy credit counseling, Vernad filed for bankruptcy in the Utica Division of the United States Bankruptcy Court for the Northern District of New York. At that time he asked that the court let him off the hook for not doing the certification process because he imprisonment was standing in the way.
The obstacle? According to Vernad, he could not obtain counseling in person and he did not have sufficient telephone or Internet access while incarcerated.
Seems logical, right? No phones, no Internet access … kind of tough to get credit counseling before filing for bankruptcy.
New York bankruptcy Judge Diane Davis, however, disagreed. She told Vernad that she didn’t think it would be a good idea to waive the credit counseling requirements for people in jail who “who do not otherwise suffer from physical or mental disabilities as contemplated by Congress … ”
The case is called In re Alexander, Case No. 09-63469 (Bankr. N.D.N.Y. 3/05/2010) (Bankr. N.D.N.Y., 2010).
Bottom line? If you’re in New York and want to file for bankruptcy then you better hope you’re not in jail. Because that’s not going to be a good enough reason to waive those certification requirements.
This photo of the Deer River in Malone, NY courtesy of johndan.
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