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Pre-Bankruptcy Credit Counseling

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, requires consumers filing for bankruptcy to receive both pre-filing credit counseling and post-filing debtor education. The counseling must be done by an agency approved by the U.S. Trustee’s office; and the counseling must have happened at most 180 days before you file for bankruptcy. Once you finish the counseling, you will receive a certificate that must be filed with the Bankruptcy Court no later than 15 days after your bankruptcy filing date.

The purpose of credit counseling is to evaluate your financial situation and determine if you really need to file for bankruptcy. The credit counseling agency can help you come up with an alternative budget plan to help you avoid filing for bankruptcy if you are able to pay your debts. Even though you might need to file for bankruptcy due to your debt and financial standing, you must still go through credit counseling. The good news is the course only takes about an hour and it can be completed over the phone or online.  

Your bankruptcy attorney can get you in touch with an approved agency; or you can find it on the U.S. Trustee’s website: http://www.justice.gov/ust/credit-counseling-debtor-education-information.

Whether you file for Chapter 7 or Chapter 13, you must take a personal financial management course or “debtor education” course after filing (This is in addition to the pre-filing Credit Counseling). The course must be provided by an agency approved by the Department of Justice; and needs to be taken in order to obtain your final discharge. If you filed with your spouse then you both will need to take this course.

Finding Approved Agencies for Financial Management Courses

Your attorney can put you in touch with an approved agency or you can find a list of government approved agencies in your area by visiting http://www.justice.gov/ust/credit-counseling-debtor-education-information.

The list will provide you with agencies that accept your course attendance in person, online or through the mail. These agencies don’t have to be nonprofit, but they must allow you to pay a sliding scale fee if you can’t afford to pay in full. Approved financial management courses must last a minimum of two hours and cover required curriculum.

Once You Complete the Course

After you complete the course, you or your attorney will file Official Form 23 with the court. This form certifies that you have taken and completed the course. You or your attorney must also provide a certificate of completion from the approved agency.

In Chapter 7, you must file Form 23 along with the certificate of completion at most 45 days after the date on which your scheduled meeting with the creditors took place. If you miss this deadline your case could be dismissed by the court. If this happens you may not get a discharge of your debt. Or you could have to spend additional money to re-open your case in order to receive a discharge from your debt.

In Chapter 13, you must file Form 23 along with the certificate of completion either before or on the date of your last plan payment. It is recommended that you take the course earlier because it provides valuable budgeting information provided. This information can go a long way in helping you complete your plan.

There are many requirements and procedures that go along with filing for bankruptcy. It can become confusing to keep track of them all and if you miss a deadline it can effect your ability to get a discharge of your debt. Let us keep track of what you need to make your case go smoothly. The call is free and you can gain a lot of knowledge that can help save you money, speed you through bankruptcy and get you on the road to financial recovery. Take the first step and give us a call today.

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