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In Re: Zarnel, No. 07-0090

By FindLaw Staff on August 30, 2010 | Last updated on March 21, 2019

In Re: Zarnel, No. 07-0090, involved an appeal from a district court's order dismissing a bankruptcy trustee's appeal for lack of standing and in the alternative affirming the bankruptcy court's decision to strike the bankruptcy petitions filed by respondents rather than to dismiss their cases.  The court vacated the order on the grounds that 1) the U.S. Trustee's responsibility to represent and protect the public interest afforded it a substantial interest in, and therefore standing, to proceed with this appeal; 2) the court needed only assure itself that it was deciding a live case or controversy, and Article III jurisdiction existed; and 3) the restrictions of 11 U.S.C. sections 301 and 109(h) were not jurisdictional, but rather elements that must be established to sustain a voluntary bankruptcy proceeding.

As the court wrote:  "This case requires us to interpret the interplay of provisions of the Bankruptcy Code that arises when an individual or entity files a petition for bankruptcy without complying with the credit counseling requirements created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), Pub. L. No. 109-8, 119 Stat. 23.  In the course of our analysis, we interpret the credit counseling requirement, 11 U.S.C. § 109(h), the provisions that govern the commencement of bankruptcy cases, 11 U.S.C. §§ 301, 302, and 303, and the statutory section governing automatic stays, 11 U.S.C. § 362."

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