In Re Husain

364 B.R. 211 (2007)

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Nature of the Case

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Facts

P filed their joint chapter 7 bankruptcy case on October 24, 2006. Ps have been ably represented by competent bankruptcy counsel. On December 8, 2006, the chapter 7 trustee filed a report of no distribution based upon her determination that there were no assets to administer for the benefit of unsecured creditors. Ps initially indicated that they intended to redeem their two vehicles. Ps undertook action to reaffirm their obligations with respect to the two vehicles. P filed a reaffirmation agreement with BB&T and a motion for approval of that agreement. P agreed to reaffirm the debt to BB&T in the amount of $12,302.03, at a simple interest rate of 14.79%. Securing this debt was a 2004 Toyota Corolla automobile, originally purchased for $ 13,049.00, and valued upon the Debtors' schedules at $10,375.00. P agreed to make 54 monthly payments in the amount of $310.25 each. On January 2, 2007, P filed with the Court a reaffirmation agreement with Toyota Motor Credit Corporation to reaffirm the debt to Toyota Motor Credit Corporation in the amount of $15,438.92, at a simple interest rate of 15.6%. Securing this debt was a 2003 Toyota Avalon automobile, originally purchased for $26,617.90 and valued upon the Debtors' schedules at $8,415.00. P agreed to make 61 monthly payments in the amount of $388.15 each. Neither agreement contained a certification by the attorney that the Agreement(s) did not impose an undue hardship on Ps. P represented to the court that his current take-home pay is $ 3,145.83 and current monthly expenses including monthly payments on post-bankruptcy debt and other reaffirmation agreements total $7,148.87, leaving $ [4,003.04] to make the required payments on this reaffirmed debt. P expected to close the gap between income and expenses with an expected raise and through working more hours. The Code contemplates that counsel's failure to certify a reaffirmation agreement terminates further consideration of the client's ability to reaffirm the debt. Ps proceeded on the assumption that their counsel's refusal to execute the certification rendered Ps 'not represented by an attorney during the course of negotiating' the Agreement(s), and they requested the Court to approve the Agreement(s) under 11 U.S.C.A. § 524(c)(6) absent their counsel's certification.