MEMORANDUM OF OPINION

VINCENT P. ZURZOLO, Bankruptcy Judge.

I. INTRODUCTION

This case involves an individual debtor who filed for relief under Chapter 13 of the Bankruptcy Code, did not participate in budget and credit counseling prior to filing for bankruptcy, and did not seek court approval to be exempted from participating in budget and credit counseling (the "Credit Counseling Requirements"). The issues are: (1) if an individual debtor is not in compliance with the Credit Counseling Requirements of § 109(h), is dismissal of the bankruptcy case mandatory, or does the court have jurisdiction and discretion to excuse the ineligibility; and (2) if the court has jurisdiction and discretion to allow a debtor to cure a § 109(h) ineligibility, what is an appropriate standard for determining if a debtor is entitled to a cure?

II. FACTS

On November 21, 2005 ("Petition Date"), Lope Manalad ("Debtor") filed a petition ("Petition") to be a voluntary debtor under chapter 13 together with a chapter 13 plan ("Plan"). The Petition was signed by Kenneth L. Haddix, bankruptcy counsel for Debtor ("Debtor's Counsel"). A hearing ("Confirmation Hearing") was set for February 13, 2006 to determine if Debtor's Plan should be confirmed under § 1325. The Confirmation Hearing was continued to June 12, 2006 to allow the chapter 13 trustee to conduct additional meetings under § 341(a), to obtain documents from Debtor, and to review the Plan. Debtor initially proposed to pay 10% of his creditors' claims, but later amended his Plan to pay 100% of the claims.

Contrary to the requirements of §§ 521(b)(1)-(2), Debtor did not file with his Petition a certificate of credit counseling or a debt repayment plan, either of which would certify that Debtor participated in a budget and credit counseling session prior to filing his bankruptcy case as is required by § 109(h)(1). Debtor also did not seek court approval to participate in budget and credit counseling after filing his Petition as is allowed under certain conditions by § 109(h)(3). Finally, Debtor did not request a waiver of participation in budget and credit counseling as is allowed in certain situations by § 109(h)(2)(A) or § 109(h)(4). On November 21, 2005, a Case Commencement Deficiency Notice ("CCDN") was generated by the bankruptcy court clerk's office and mailed to Debtor and Debtor's counsel, notifying Debtor that these documents needed to be filed.

On March 15, 2006, the court issued an Order to Show Cause Why Case Should Not Be Dismissed ("OSC") for failure to comply with the Credit Counseling Requirements and set a hearing on the OSC for April 25, 2006. On April 19, 2006, Debtor filed a response to the OSC ("Debtor's Response"). Debtor's Counsel and counsel for the United States Trustee ("UST") appeared at the April 25, 2006 hearing. Based upon Debtor's Response and upon arguments of Debtor's Counsel and counsel for the UST, the court continued the hearing on the OSC to June 12, 2006 to give Debtor's Counsel and counsel for the UST an opportunity to brief the issue of an individual's eligibility to be a debtor under Title 11 if not in compliance with the Credit Counseling Requirements.

On May 26, 2006, Debtor filed "Debtor's Statement Re Justification For Not Filing the Required Certificate of Credit Counseling Debt Repayment Plan" ("Debtor's Justification"). On June 6, 2006, the UST filed a "Reply to Debtor's Statement of Justification" ("UST Reply"). Debtor's Counsel and counsel for the UST appeared at the continued hearing. Based upon Debtor's Justification, the UST Reply, and on arguments made at the continued hearing, the court set a further hearing on the OSC for July 24, 2006 and ordered Debtor to appear at that hearing. The court also ordered Debtor to, prior to the July 24, 2006 hearing, participate in a budget and credit counseling briefing described in § 109(h)(1) and file the certificate of completion and debt repayment plan described in §§ 521(b)(1)-(2).

On July 17, 2006, Debtor participated in a budget and credit counseling briefing, and on July 18, 2006, filed a Certificate of Counseling ("Certificate"). The Certificate indicated that a debt repayment plan was not prepared. Debtor, Debtor's Counsel, and counsel for the UST appeared at the July 24, 2006 hearing. The July 24, 2006 hearing was continued to August 2, 2006 and then again to September 26, 2006. The Plan was confirmed on October 16, 2006.

Debtor's position is that he was forced to file his Petition on the date that he did because his employer intended to obey a wage garnishment order for past due child support payments. Debtor asserts that the only effective way to treat his creditors' claims is through a chapter 13 plan. Upon advice of Debtor's Counsel, Debtor believed that the Credit Counseling Requirements did not apply to his bankruptcy case because his debts were not consumer debts. Therefore, Debtor asserts that he should be excused from complying with the Credit Counseling Requirements and be allowed to confirm and consummate his Plan.

The position of the UST is that Debtor's bankruptcy case must be dismissed for lack of eligibility because Debtor did not comply with any of the Credit Counseling Requirements. The UST argues that Debtor's ineligibility under Title 11 cannot be cured under any circumstances, and it was not cured by Debtor participating in a budget and credit counseling briefing on July 17, 2006 and filing his Certificate on July 18, 2006.

III. ISSUES

The following issues arise from the facts and applicable law in this case:

1. If an individual debtor is not in compliance with the Credit Counseling Requirements, is dismissal of the bankruptcy case mandatory, or does the court have jurisdiction and discretion to excuse the ineligibility?

2. If the court has jurisdiction and discretion to allow a debtor to cure a § 109(h) ineligibility, what is an appropriate standard for determining if a debtor is entitled to a cure?

IV. ANALYSIS

A. Credit Counseling Requirements

As discussed above, under § 109(h)(1) or subsection (h)(3), an individual must participate in a session of budget and credit counseling within 180 days prior to or within up to 45 days following the filing of a petition under Title 11, depending upon the circumstances under which the individual filed a petition. Under § 521(b) an individual must provide proof of participation in budget and credit counseling by filing a certification of participation and a copy of the debt repayment plan if a debt repayment plan was prepared at the counseling session; the certification is supposed to describe the services that were provided to the debtor and must be provided by the agency that provided the counseling. Under the version of Rules 1007(b)(3) and 1007(c) in effect on the Petition Date, the time for filing these documents was with the Petition, or within a court approved extended period. Debtor filed his certificate tardily, one day after participating in budget and credit counseling, 239 days after filing his Petition.

Under § 109(h)(2)(A) or subsection (h)(4), an individual debtor can be exempted from participation in budget and credit counseling and the filing of a certificate of completion by establishing that (1) the UST determined that adequate credit counseling services were not available in the individual's district, (2) the individual is incapacitated or is disabled, or (3) the individual is on active duty in a military combat zone. None of these exemptions apply to Debtor in this case, and Debtor does not argue that any of them apply.

B. Dismissal and Jurisdiction

The position of the UST is that dismissal is mandatory for Debtor's bankruptcy case or any other bankruptcy case in which the Credit Counseling Requirements are not satisfied, and therefore, the court lacks jurisdiction to fashion a remedy other than dismissal. I disagree with the UST's argument, based upon a review of the Bankruptcy Code, case law concerning jurisdiction and/or dismissal, and consideration of the harsh consequences of dismissal.

1. Jurisdiction and Statutory Construction

In a recent opinion, the Supreme Court analyzed how the absence of jurisdiction differs from a missing element of a claim for relief and what is meant when the language of a statute is silent on jurisdiction. In Arbaugh v. Y H Corp. dba the Moonlight Café, 546 U.S. 500 (2006), a female employee brought an action under Title VII of the 1964 Civil Rights Act in federal court against her former employer, charging sexual harassment. The case was tried by a jury, which returned a verdict in favor of the plaintiff. After the conclusion of the trial, the defendant requested dismissal of the action under Federal Rule of Civil Procedure 12(h)(3) for lack of subject matter jurisdiction. The defendant cited the definition of "employer" under 42 U.S.C. § 2000e(b) for the premise that it was not subject to liability under Title VII because the defendant had fewer than fifteen employees and therefore did not meet the definition of an employer for Title VII purposes. This was the first stage of the proceedings at which the defendant raised the issue of jurisdiction or the fifteen employee requirement. The district court determined that the defendant had fewer than fifteen employees and therefore granted the motion to dismiss. The dismissal was affirmed by the Fifth Circuit Court of Appeals.

The Supreme Court granted certiorari to resolve conflicting opinions in Courts of Appeals on the question of whether Title VII's employee numerosity requirement of 42 U.S.C. § 2000e(b) is jurisdictional in nature or simply an element of a plaintiff's claim for relief. In making its determination, the Court looked to the language that Congress inserted into the statute. In her complaint, the plaintiff invoked federal-court subject matter jurisdiction under 28 U.S.C. § 1331, pleading a colorable claim arising under a law of the United States. The plaintiff's claim arose under a federal law, namely 42 U.S.C. § 2000e-2(a)(1), and there is no mention of jurisdiction in this statute. Instead, the Civil Rights Act's jurisdictional provision is 42 U.S.C. § 2000e-5(f)(3), which empowers federal courts to adjudicate civil actions brought under Title VII. This jurisdictional statute was added by Congress to underscore Congress' intention to provide a federal forum for the adjudication of claims without setting an amount-in-controversy threshold. The employee numerosity requirement cited by the defendant appears in a separate section headed "Definitions," 42 U.S.C. § 2000e.

In its analysis, the Supreme Court reasoned:

Of course, Congress could make the employee-numerosity requirement 'jurisdictional,' just as it has made an amount-in-controversy threshold an ingredient of subject-matter jurisdiction in delineating diversity-of-citizenship jurisdiction under 28 U.S.C. § 1332. But neither § 1331, nor Title VII's jurisdictional provision, 42 U.S.C. § 2000e-5(f)(3) (authorizing jurisdiction over actions 'brought under' Title VII), specifies any threshold ingredient akin to 28 U.S.C. § 1332's monetary floor. Instead, the 15-employee threshold appears in a separate provision that does not speak in jurisdictional terms or refer in any way to the jurisdiction of the district courts.

Arbaugh, 546 U.S. at 510.

The Court continued its reasoning and adopted a bright line test, holding that:

If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not be left to wrestle with the issue [citation omitted]. . . . But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as non-jurisdictional. Applying that readily administrable bright line to this case, we hold that the threshold number of employees for application of Title VII is an element of a plaintiff's claim for relief, not a jurisdictional issue.

Arbaugh, 546 U.S. at 510.

Applying this test to the present case, Congress has not inserted in § 109(h) or anywhere else in the Code that eligibility is a jurisdictional issue. Therefore, I conclude that § 109(h) eligibility is not jurisdictional in nature. 2. The Bankruptcy Code Does Not Mandate Dismissal

There is a completely separate statutory basis for concluding that a lack of eligibility does not mandate dismissal. Nowhere in Title 11 is there a provision setting forth the remedy for failure to comply with the Credit Counseling Requirements, while the remedy of dismissal is specifically provided for in other situations.

For example, in § 521(i)(1) Congress mandates dismissal for failure to file certain schedules, statements, and employer payment information, if such documents are not filed within 45 days of filing a bankruptcy petition. Congress listed these schedules, statements, and other information in § 521(a)(1), but set forth a specific subsection, § 521(b), to describe the budget and credit counseling documents that need to be filed. Section 521(i)(1) omits the credit counseling certificate and debt repayment plan from the mandatory dismissal remedy that is imposed when a debtor fails to file many of the other documents required in a bankruptcy case. Thus, I conclude that Congress intended that dismissal is not mandated when debtors do not comply with the Credit Counseling Requirements.

Furthermore, even in situations where § 521(i)(1) mandates dismissal, the court has discretion under § 521(i)(3) to extend the period for filing documents listed in § 521(a) and, under § 521(i)(4), to decline to dismiss a case if the court finds that the debtor attempted in good faith to file the required information and that the best interest of creditors would be served by administration of the case."

Additionally, in certain conditions a case may be dismissed upon a motion and hearing if the elements of §§ 707(a)-(b), 1112(b), or 1307(c), are met. Likewise, even in these situations, the court has discretion to find that dismissal is not the appropriate remedy.

I conclude that Congress, by choosing not to mandate dismissal as the consequence for failing to comply with the Credit Counseling Requirements, gave the courts discretion to fashion a remedy that is appropriate under the circumstances of each case.

3. Case Law on §§ 109 and 303(a) Eligibility and Jurisdiction

This conclusion is supported by the Ninth Circuit Bankruptcy Appellate Panel's ("BAP") ruling in In re Wenberg, 94 B.R. 631 (9^th Cir. BAP 1988) in which the interplay of § 109(e) and jurisdiction was analyzed. The debtors in Wenberg were individuals who filed a petition under chapter 13 and listed debts owed to a particular creditor as contingent and unliquidated. The creditor objected to confirmation of the debtors' chapter 13 plan on the basis that the creditor's claims were liquidated. The creditor filed a motion to convert or dismiss the debtors' case and for relief from the automatic stay to proceed with the state court lawsuit that gave rise to the creditor's claims. The debtors never filed a formal motion to convert their chapter 13 case to a case under chapter 7. The bankruptcy court concluded that the particular debts were liquidated and therefore the amount of the debtors' debts exceeded the debt limits set forth in § 109(e). The court ruled that the debtors were ineligible to be debtors under chapter 13 and entered a sua sponte dismissal of the case on the basis that eligibility under § 109(e) is jurisdictional and therefore the court lacked jurisdiction to enter an order converting the chapter 13 case to a case under chapter 7.

On appeal by the debtors, the Ninth Circuit BAP affirmed the bankruptcy court's ruling that the debts were liquidated, but the panel reversed in favor of the debtors on the issue of dismissal, holding that § 109 eligibility issues are not jurisdictional in nature.

In other decisions, Circuit Courts of Appeals have also concluded that debtor ineligibility does not strip a bankruptcy court of jurisdiction to consider other issues or enter orders. The Fifth Circuit Court of Appeals addressed eligibility under § 109(g)(2) and jurisdiction in In re Phillips, 844 F.2d 230 (5^th Cir. 1988). In that case, a debtor ("Phillips") filed a petition under chapter 13; she then moved to convert the chapter 13 case to one under chapter 11 or chapter 7. A secured creditor filed a motion for relief from the automatic stay under § 362 to proceed with a foreclosure. Prior to a ruling on the debtor's motion to convert or the creditor's motion for relief from the automatic stay, the debtor requested and obtained an order dismissing the chapter 13 proceeding. Soon thereafter, a second creditor ("Bank") commenced an action in state court against the debtor. The debtor then filed a second bankruptcy petition, this time under chapter 7. The Bank filed a motion to dismiss the case on the grounds that under § 109(g)(2), Phillips was not eligible to be a debtor because her second petition had been filed within 180 days of the filing of her first petition and another creditor had filed a motion for relief from the automatic stay during the pendency of the first bankruptcy. The court denied the Bank's motion to dismiss, and the Bank appealed the order to the district court without seeking leave to appeal under 28 U.S.C. § 158(a) and without attempting to stay the bankruptcy proceeding pending appeal as permitted under Rule 8005. The district court denied the appeal as moot, as the bankruptcy case proceeded to a discharge for the debtor while the appeal was pending. The Bank appealed this ruling to the Fifth Circuit Court of Appeals, which determined that it would lack jurisdiction if it found that the bankruptcy court order was interlocutory (i.e. a non-final order), and that the action taken by the district court failed to cure the non-final nature of the bankruptcy court order. The court dismissed the appeal after concluding that the bankruptcy court order was non-final in nature and that the district court order did not cure the non-final nature of the bankruptcy court order.

One of the Bank's arguments in seeking dismissal was that eligibility under § 109(g) raised an issue of subject matter jurisdiction. In its analysis of this argument, the Fifth Circuit reached two conclusions. First, it cited United States Supreme Court authority for the holding that an order denying a motion to dismiss for lack of subject matter jurisdiction is not a final order, and therefore, even if the Bank's appeal raised the issue of subject matter jurisdiction, the court would still have to dismiss the appeal because the underlying order failed to meet the criteria of 28 U.S.C. §§ 158(a) and (d). Second, the court concluded that eligibility under § 109(g) does not raise an issue of subject matter jurisdiction. The court cited five main reasons for its holding: (1) Congress framed § 109(g)(2) in terms of eligibility, without referring to jurisdiction; (2) Congress provided creditors with alternative procedures when a debtor is ineligible, including objection to discharges of ineligible debtors under §§ 523 and 727 and appealing the denial of a motion to dismiss the petition and simultaneously staying any further proceedings pursuant to Rule 8005; (3) if eligibility raised an issue of subject matter jurisdiction, the parties could not expressly waive, or be held to have waived, their objections on the issue; (4) the issue may, and indeed must, be raised on appeal, even on the court's own motion; and (5) to hold that the issue of debtor eligibility implicates subject matter jurisdiction would have far-reaching consequences.

The issue of § 109(e) eligibility and jurisdiction was addressed by the Eighth Circuit Court of Appeals in In re Rudd, 866 F.2d 1040 (8^th Cir. 1989). In that case, the Rudds were co-debtors who filed their sixth chapter 13 petition within a four year period. The chapter 13 trustee moved under § 1307(c) to dismiss or convert the case on the grounds that the debtors had abused the bankruptcy system and were ineligible to be debtors under chapter 13 because their unsecured debts exceeded the $100,000.00 limit of § 109(e). The debtors opposed conversion of their case, citing In re Wulf, 62 B.R. 155, 158 (Bankr.D.Neb. 1986) for the proposition that when a person is found by the court under § 109(e) to be ineligible to be a debtor under chapter 13, the case filed by that person is a "nullity", and the court has no jurisdiction to convert the non-existent case to a case under another chapter. The debtors also cited In re Koehler, 62 B.R. 70, 72-73 (Bankr.D.Neb. 1986) for the proposition that the debt limits in § 109(e) were comparable to the amount-in-controversy requirement for district court's diversity jurisdiction. The trustee asked the bankruptcy court to make an exception to the rule cited in Wulf. The bankruptcy court granted the motion to convert, and, on appeal, the conversion order was affirmed by the district court. However, the district court disapproved of the holding of Wulf, rather than relying on an equitable exception to it. Instead, the district court reasoned that a debtor's ineligibility for chapter 13 relief is more like a failure to state a claim than it is like a failure to satisfy the amount in controversy in a diversity case; the court concluded that such ineligibility does not deprive the court of subject matter jurisdiction. The debtors appealed the ruling of the district court, but the Eighth Circuit Court of Appeals affirmed the district court. In its analysis, the court specifically disapproved of the holdings in Wulf andKoehler, and it cited with approval the conclusions of the court in Phillips. The court cited Northern Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, 71 (1982), for its holding that the filing of a petition in bankruptcy court seeking assistance in the restructuring of debtor-credit relations is at the core of the federal bankruptcy power. The court cited 28 U.S.C. §§ 1334 and 157 to conclude that the bankruptcy court has jurisdiction to administer the ensuing case in accordance with Title 11. The court further concluded that unlike 28 U.S.C. § 1332, which grants diversity jurisdiction only when the amount in controversy requirement is met, § 109(e) is not meant to restrict jurisdiction granted under 28 U.S.C. §§ 1334 and 157.

The issue of eligibility under § 109(c) and jurisdiction was addressed by the Tenth Circuit Court of Appeals in In re Hamilton Creek Metropolitan Dist., 143 F.3d 1381 (10^th Cir. 1998). In that case, a municipality filed for protection under chapter 9 and negotiated a debt adjustment plan with its bondholders, resulting in confirmation of the plan by the court. Problems arose with carrying out the plan. The municipality filed a second petition under chapter 9, to which a bondholder objected. The court dismissed the second petition on the grounds that the municipality was ineligible to be a debtor under chapter 9 because the debtor did not meet the criteria of insolvency set forth in § 109(c) and defined in § 101(32)(C). On appeal by the municipality, the district court affirmed the dismissal. On appeal again, the Circuit Court affirmed the dismissal. As part of its ruling, the Circuit Court reasoned that none of the § 109(c) criteria is jurisdictional in nature.

Finally, the issue of eligibility under § 303(a) and jurisdiction was addressed by the Fifth Circuit Court of Appeals in In re McCloy, 296 F.3d 370 (5^th Cir. 2002), and relied upon by the Eighth Circuit Court of Appeals in In Re Marlar, 432 F.3d 813 (8^th Cir. 2005). In McCloy, creditors filed an involuntary chapter 7 petition against the McCloys, husband and wife. The case was subsequently converted to a case under chapter 11 and then back to a case under chapter 7. The bankruptcy court approved a settlement with a petitioning creditor, involving a parcel of property that it determined was community property and belonged to the bankruptcy estate. The debtors objected to the settlement, and at some point had filed a motion to dismiss the involuntary petition. The debtors appealed the settlement order to the district court, which affirmed the trial court. The debtors appealed again and the Circuit Court affirmed the district court ruling. In the second appeal, Mr. McCoy argued that he was a farmer and therefore ineligible under § 303(a) to be an involuntary debtor. Mr. McCoy's status as a farmer was not ruled on by the bankruptcy court or considered by the district court on appeal and therefore the Circuit Court did not address the issue. However the Circuit Court held:

Therefore, because farmer status is not jurisdictional but is an affirmative defense that may be waived, we do not consider McCloy's argument that he is a farmer and therefore not subject to an involuntary bankruptcy proceeding.

McCloy, 296 F.3d at 376.

Similarly, in Marlar, an involuntary chapter 7 petition was filed against a debtor, and an order for relief was subsequently entered. Five years later, the debtor filed a motion to dismiss his case, arguing that he was a family farmer and, under § 303(a), an involuntarily petition could not have been commenced against him. The bankruptcy court denied the motion without reaching a conclusion of the debtor's status as a farmer, instead holding that the debtor had waived his right to assert ineligibility under § 303(a). The district court and Eighth Circuit Court of Appeals affirmed the order denying the motion to dismiss, with the latter citing McCloy for its conclusion that an individual's status as a farmer is not jurisdictional, but rather it is an affirmative defense that may be waived and was waived in that case.

In light of the collective wisdom of the decisions discussed above, along with the holding in Arbaugh, I conclude that I have jurisdiction and discretion to allow Debtor to cure his § 109(h) eligibility deficiency.

4. Case Law on § 109(h) and Dismissal

Numerous courts have published opinions on the issue of the Credit Counseling Requirements. A majority have concluded that dismissal is mandated when a debtor is found to have not complied with the Credit Counseling Requirements, and in virtually all of these cases, the issue has been whether a debtor has timely provided a satisfactory explanation of exigent circumstances. In other cases, the court ordered dismissal of petitions but did not provide any discussion on the distinction between or the impact of dismissing a bankruptcy petition as opposed to dismissing a bankruptcy case, including one court which also made a ruling about the impact of a debtor re-filing a bankruptcy case and the reduced availability of the automatic stay of § 362. To date, at least nine courts have concluded that remedies other than dismissal of the bankruptcy case are appropriate despite failure of a debtor to comply with the Credit Counseling Requirements.

a. Courts Allowing Bankruptcy Case to Proceed Without Dismissal

In In re Brickson, 346 B.R. 497 (Bankr.N.D.Cal. 2006), a husband and wife filed a voluntary chapter 7 petition. More than 180 days prior to filing their petition, and prior to the effective date of BAPCPA, the debtors sought the assistance of a credit counseling service because of a job loss and inability to pay the family's bills. The counseling service recommended that the debtors file for bankruptcy protection, but the debtors were determined to pay their creditors outside of bankruptcy. A debt repayment plan was formulated, and the debtors paid $2,200 per month for several months (more than $11,000.00) before it became apparent that they could not keep up with payments. The debtors revisited the credit counseling service in late July 2005 and were advised again to file for bankruptcy, which they did on November 22, 2005. On December 2, 2005, the UST filed a motion to dismiss the debtors' case under § 707(a) on the grounds that debtors' initial participation in credit counseling was more than 180 days prior to filing their petition, and the agency which provided the credit counseling service had not been approved by the UST. Promptly thereafter, the debtors participated in and paid for an additional credit counseling briefing and filed their certificate of completion. The court denied the UST's motion to dismiss on multiple grounds: (1) the debtors' performance represented their very best effort to comply with the Credit Counseling Requirements and was substantially in compliance with the spirit of the intent of the Credit Counseling Requirements; (2) the debtors had received extensive pre-petition credit counseling and made substantial payments to creditors from the repayment plan; (3) the debtors' need for a bankruptcy filing was not and could not have been obviated by additional credit counseling, and the debtors were keenly aware of the implications of the bankruptcy filing; (4) by participating in credit counseling again after filing their petition, the debtors had now paid twice for credit counseling; and (5) it was inequitable to require the debtors to start over, pay a second $299.00 filing fee, and be subject to potential limitations of the automatic stay.

In In re Hess, 347 B.R. 489 (Bankr.D.Vt. 2006), a debtor participated in budget and credit counseling approximately three months before filing his chapter 7 petition, but the agency was not yet approved by the UST. The debtor filed his petition; then he participated in budget and credit counseling from an approved agency eleven days later. The UST filed a motion to dismiss the debtor's case under § 707(a) for failure to comply with the Credit Counseling Requirements. The court denied the motion, concluding that the language of § 707(a) does not mandate dismissal and that Congress did not intend to limit the court's exercise of discretion under § 707(a) when determining a motion to dismiss based upon a credit counseling eligibility defect. The court compared the discretionary language of § 707(a) with the mandatory dismissal language of §§ 521(e)(1)(B) and 521(i). The court established a "totality of the circumstances" test, identifying six essential elements to consider:

1. Whether the debtor filed the case in good faith;

2. Whether the debtor took all reasonable steps to comply with the statutory requirements;

3. Whether the debtor's failure to comply was the result of circumstances that were both extraordinary and beyond the control of the debtor;

4. Whether the debtor's conduct meets the minimum requirements of § 109(h);

5. Whether any party would be prejudiced by allowing the case to proceed; and

6. Whether there are any unique equitable factors that tip the balance in one direction or another.

Hess, 347 B.R. at 498.

In In re Petit-Louis, 344 B.R. 696 (Bankr. S.D.Fla. 2006), a debtor filed a voluntary chapter 7 petition and requested a waiver of the Credit Counseling Requirements under § 109(h)(2) on the basis that he only spoke Creole fluently, had limited English language skills, and that the approved credit counseling agencies in the district lacked Creole credit counselors. The UST filed a motion to dismiss the debtor's case, which the court denied. The UST filed a motion for reconsideration, which the court also denied.

In In re Parker, 351 B.R. 790 (Bankr. N.D.Ga. 2006), a debtor filed a voluntary petition under chapter 7 on February 6, 2006. The debtor did not participate in budget and credit counseling prior to filing his petition. Fifteen days post-petition, the debtor sought court approval to obtain credit counseling services, although the debtor never actually obtained the credit counseling briefing. The debtor also did not submit payroll information from an employer as required under § 521(a)(1)(B)(iv). The chapter 7 trustee filed a motion to sell the debtor's "Fantasy Houseboat" and set the hearing for May 30, 2006. The debtor then filed a motion to dismiss his bankruptcy case, arguing that he was ineligible to be a debtor for failing to comply with the Credit Counseling Requirements, and that his case should have been automatically dismissed under § 521(i)(1) for not submitting the required payroll information. The UST opposed debtor's motion and supported the sale. The court denied the debtor's motion, holding that the debtor had waived his right to contest eligibility by actively participating in his bankruptcy case for nearly four months, and that there was no payroll information to submit because the debtor had testified at his § 341(a) meeting of creditors that he was self-employed during the 60-day period described by § 521(a)(1)(B)(iv).

In In re Romero, 349 B.R. 616 (Bankr.N.D.Cal. 2006), the debtors filed a voluntary chapter 7 petition, had requested credit counseling three days before filing their petition, were unable to obtain the counseling before filing their petition, and needed to file for bankruptcy to prevent a garnishment of one of the debtor's wages. The debtors participated in credit counseling four days after filing their petition and promptly filed the certificate of completion. The UST filed a motion to dismiss the debtors' case, apparently arguing that the situation lacked exigent circumstances because the debtors knew of the impending wage garnishment. The court denied the motion, instead finding that a looming garnishment met the exigent circumstances test under § 109(h)(3). b. Court Which Rendered the Case Void Ab Initio

In In re Rios, 336 B.R. 177 (Bankr. S.D.N.Y. 2005), the court "struck" the debtor's chapter 7 petition rather than dismissing it due to the debtor's failure to comply with the Credit Counseling Requirements. The court reasoned that if the Credit Counseling Requirements were indeed a prerequisite to eligibility to be a debtor, then failure of the debtor to comply with the Credit Counseling Requirements rendered his case "void ab initio," as if it never had been commenced. The court also reasoned that dismissal of the case would limit the debtor's options and would have led to a result that Congress did not intend under BAPCPA.

c. Court Which Struck the Petition And Ordered Additional Relief

In In re Hubbard, 333 B.R. 377 (Bankr. S.D.Tex. 2005), the court analyzed whether or not five sets of individual or co-debtors had met the exigent circumstances test of § 109(h)(3). The court referred to these petitioners as "putative debtors" and found that in four of the five cases, the debtors had properly described exigent circumstances, but that none of the putative debtors had submitted a certification that was satisfactory to the court. Instead of dismissing the five cases, the court concluded that no "case" had been commenced under § 301, and therefore there was no "case" to dismiss. Thus, the court struck the petitions in these five cases. The court then set an order to show cause under § 329 as to why counsel for these debtors should not pay back to the debtors the funds obtained for advising them and for preparing and filing these petitions, including filing fees. d. Courts Which Struck the Petition And Analyzed Automatic Stay

In In re Thompson, 344 B.R. 899 (Bankr. S.D.Ind. 2006), the debtors filed a petition under chapter 13 without complying with the Credit Counseling Requirements. The court struck the petition, ruling that no case had been commenced. The UST filed a motion for reconsideration on the grounds that the case should have been dismissed, not the petition struck. The court denied the UST's motion on the grounds that striking a petition is analogous to a court striking a civil complaint under Rule 7003 when an attorney is not admitted to practice before the courts of a district. As the attorney is ineligible to commence a case in that district, no case has been commenced. The court also analyzed the relationship between the automatic stay and striking a petition, concluding that the automatic stay is invoked when the petition is filed and remains in place until it is either modified or the proceeding is closed. The court concluded that if it had rendered the case "void ab initio," the automatic stay would not have been invoked.

In In re Elmendorf, 345 B.R. 486 (Bankr. S.D.N.Y. 2006), the court reached the same conclusion that ineligibility under § 109(h) should result in striking a petition but concluded that in such situations the automatic stay was not invoked. As part of its reasoning, the court concluded that ineligibility of § 109(h) is not curable and that courts have the power under § 105 to strike the petition rather than dismiss the bankruptcy case. 5. Case Law on §§ 109(e) and 109(g) and Dismissal

Courts in related situations have found that dismissal is not the mandatory remedy for failing to meet a § 109 eligibility requirement. As discussed above, the Ninth Circuit BAP in Wenberg overruled a dismissal order and remanded the case to allow the ineligible debtors to file a motion to convert from a case under chapter 13 to a case under chapter 7. In Rudd, the Eighth Circuit Court of Appeals affirmed an order that had affirmed a conversion order without first dismissing the bankruptcy case. 6. Consequences of Dismissal

Debtors who file for bankruptcy under BAPCPA without complying with the Credit Counseling Requirements face the harsh consequences visited upon a debtor who must file another bankruptcy case if the prior bankruptcy is dismissed for not strictly adhering to the Credit Counseling Requirements. For a debtor in financial straits, this means the expense of another filing fee ($299.00) and the time, effort, and possible attorneys' fees needed to prepare a new petition and set of case commencement documents. It also means a potential limited availability of the protection of the automatic stay. Under § 362(c)(3), when a debtor files a petition after a petition was pending within the preceding year, the debtor may lose the protection of § 362(a) thirty days after filing the later petition with respect to secured creditors and lessors. A debtor has an opportunity to obtain an order continuing the automatic stay but must promptly file a motion, schedule a hearing, and overcome a presumption that the later case was not filed in good faith. For debtors who had one case dismissed, then a second case dismissed for failure to comply with the Credit Counseling Requirements, they must wait a full year to file another petition if they wish for any protection of the automatic stay.

Thus, because the consequences of dismissal are so significant, Congress would have mandated dismissal as a remedy for non-compliance with the Credit Counseling Requirements as it did in other situations if it intended dismissal to be the only available remedy.

C. Test for Cure of § 109(h) Ineligibility

Based upon the foregoing, I conclude that it is appropriate to exercise my discretion in determining whether this bankruptcy case should be dismissed due to ineligibility under § 109(h). The following factors are pertinent:

1. The debtor has a reasonable explanation for not participating in budget and credit counseling within 180 days prior to filing a bankruptcy petition;

2. The debtor participates in budget and credit counseling once the debtor learns that it is necessary; and

3. At the budget and credit counseling session, it is determined that the individual's debts could not have been paid outside of bankruptcy.

D. Application of Test to the Instant Case

First, Debtor has a reasonable explanation. Debtor's Counsel advised him that the Credit Counseling Requirements only applied to debtors with consumer debts, while Debtor's debts were non-consumer in nature, being debts for past taxes and child support payments. Though the advice of Debtor's Counsel was erroneous, nevertheless Debtor is entitled to rely on his attorney's advice. The changes to the Bankruptcy Code brought on by BAPCPA were numerous and complex, requiring courts and counsel alike much study to sort out the new law and its impact. It is conceivable that an attorney, within one month after the effective date of BAPCPA, would miss one of the new rules imposed by BAPCPA. Furthermore, Debtor has proposed a 100% payout to his creditors under a chapter 13 plan. It would be a harsh result if Debtor suffered a dismissal with all the negative consequences that flow from that because Debtor consistently followed the advice of his counsel.

Secondly, I ordered Debtor to participate in budget and credit counseling and to file the certificate of completion, and Debtor timely complied with both of these orders.

Thirdly, as part of his participation in budget and credit counseling, a budget and repayment plan was not prepared by the approved credit counseling agency. This demonstrates that Debtor did not have a better payment alternative other than through bankruptcy.

E. Dicta

The purpose for requiring individual debtors to comply with the Credit Counseling Requirements is not specified in § 109(h) or anywhere else in Title 11, and the legislative history is only moderately instructive. To begin with, do the courts and the UST really know what information is being disseminated by credit counseling agencies, and if so, the value of that information? If debtors are receiving information about credit rating and budgeting, it is possible that receiving this information prior to filing a bankruptcy petition is designed to influence whether or not a debtor files for bankruptcy. However, there is no mention in § 109(h) or its legislative history of using credit counseling to persuade an individual to not file a bankruptcy petition or to file a petition under one chapter rather than another chapter. Nor is there support cited for the proposition that being told about bankruptcy's negative impact on one's credit rating results in either an improvement in debtors' credit ratings or causes one to rethink one's decision to file for bankruptcy. It is hard to imagine that debtors, who have lost their jobs or sustained major medical bills, are more focused on their credit rating than getting out from under the pressure of bills that they cannot pay. It is also possible that having information about the negative consequences on one's credit rating is designed to help a debtor take steps to better understand his credit and to repair his credit after the bankruptcy case is in progress or is completed.

Additionally, it is possible that Congress intended individuals to be spared from having a bankruptcy case on their credit rating, as well as other negative consequences. However, consider the many individuals who truly need the protection of the Bankruptcy Code and, for whatever reason, file for bankruptcy without complying with the Credit Counseling Requirements. If dismissal was intended to be the mandatory remedy, those individuals would then comply with the Credit Counseling Requirements and file a second bankruptcy case to obtain the relief that they need. It is nonsensical that Congress would prefer that debtors have a bankruptcy case and a dismissal on their credit report without having obtained the relief offered under the Bankruptcy Code. It is equally nonsensical that Congress would prefer debtors to have a bankruptcy case, a dismissal, and then a second bankruptcy filing on a debtor's credit report. It makes more sense to minimize the negative consequences on a credit report by allowing debtors who do not obtain credit counseling prior to filing their bankruptcy petition to continue with their bankruptcy case rather than suffer a dismissal.

While I am not here to read the mind of Congress, I recognize that Congress provides for a variety of settings under which it is acceptable for a debtor to first file a bankruptcy petition and then be counseled about credit rating or not be counseled at all. I conclude that the provisions of BAPCPA leave room for an individual to decide if bankruptcy is the appropriate option without first hearing the magic words that may be dispensed during budget and credit counseling. Thus, on balance, the positive opportunities provided for debtors under the Bankruptcy Code may equal or outweigh the negative consequences on a debtor's credit rating from filing for bankruptcy.

F. Joinder in Conclusions of Law

The following judges of the United States Bankruptcy Court of the Central District of California join in the conclusions of law reached in the above Opinion:

Honorable Thomas B. Donovan

Honorable Richard M. Neiter

The following judges of the United States Bankruptcy Court of the Central District of California join in the conclusion of law that § 109(h) eligibility is not jurisdictional: