Thinking About Bankruptcy? Don’t Forget Your Two Mandatory Credit Counseling Courses

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Posted on February 26, 2008
Filed Under Debt Consolidation, Avoid Bankruptcy, Business Bankruptcy, Chapert 11, Chapter 13, Blog Carnivals |

Bankruptcy lawyers regularly field questions from prospective clients about the credit counseling and financial management course requirements set out in the bankruptcy laws. When are these courses required? How much do they cost? Why are there two courses? How long do the courses take?

Here is a brief overview of the credit and financial management courses that you are required to take as part of your bankruptcy filing:

Pre-Bankruptcy Credit Counseling

Before you file, you must complete a “credit counseling” course. This counseling requirement applies whether you are filing Chapter 7 or Chapter 13. The certification certificate that you receive upon completion of this course is part of our standard filing paperwork. Pre-filing credit counselors must be Trustee approved. Here is what will be covered:

Generally the credit counseling courses last anywhere from 60 to 90 minutes and can be done in person, on the web or via telephone. Most of the credit counseling agencies we have seen offer this counseling for between $35 and $50 per person. If you cannot afford to pay the counselor’s fee, you may request a fee waiver from the counselor’s office. All fees and payment should be discussed and agreed to prior to the session.

Pre-Discharge Financial management Course

If you successfully complete your bankruptcy, your judge will issue an official court document called an “order of discharge.” This discharge order formally terminates your obligation to pay the debts that were included in your case. Before you can get this discharge order, however, you must complete a course called the Financial Management Education course. As is the case with pre-bankruptcy credit counseling, the financial management counselor must be approved by the Trustee in your filing jurisdiction. The purpose of the financial management course is to educate you about:

Generally financial management courses last about two hours and can be done in person, on the web or via telephone. As is the case with credit counseling, the fee will be in the $35 to $50 range.

The financial management counseling company will fax or email a certificate to you and/or your lawyer. This certificate must be filed with the clerk of court. If you do not file this certificate prior to the time your case is closed, you will not receive a discharge.

Both course completion certifications together prove that the debtor has been educated by professionals to understand proper budgeting, money management and how to use credit without ending up in trouble. Of course these aren’t the only bankruptcy filing requirements, but these are two of the mandatory steps. If you have any specific questions about pre-bankruptcy credit counseling or about pre-discharge financial management education, please call an experienced personal bankruptcy lawyer.

Jonathan Ginsberg has practiced consumer bankruptcy law in Atlanta, Georgia for over 20 years. In addition to representing debtors in Chapter 7 and Chapter 13 bankruptcy cases, Jonathan serves as a continuing education instructor, assisting other lawyers learn about new bankruptcy law developments and practice management skills.

His consumer bankruptcy web sites include http://www.atlanta-bankruptcy-attorney.com and a consumer bankruptcy blog at http://www.thebklawyer.com/thebkblog/

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It is not too late to start taking steps towards debt management.

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