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Before you’re legally allowed to file for Chapter 7, you’ll have to complete a Credit Counseling Briefing with an agency listed in the registry of the U.S. Trustee’s office.
Your bankruptcy attorney can direct you to how and where to take this mandatory course.
Some bankruptcy cases have been thrown out because the individual filing did not complete or file the credit counseling certification and bankruptcy judges have hardly any room to waive or offer an extension to complete this step.
It cannot be stressed enough that the course must be completed before filing bankruptcy.
You may complete the Credit Counseling Briefing in person, over the telephone or via the Internet.
Sessions that qualify include an evaluation of your personal finances, discussion of any possible alternatives to bankruptcy, and help you design a personal budget plan.
After you’ve finished, you’ll get a certificate of proof that you must include with your filing.
Is Credit Counseling Expensive?
Of course the cost will vary depending on a number of factors, including where you live and whether you sign up for an online, phone or live course. However, the U.S. Trustee’s office states that the average course runs about $50.
Law requires an approved agency to tell you the fees up front, without any extra cost for issuing the certificate.
When Should I Complete My Credit Counseling Briefing?
You must have completed the credit counseling briefing within six months before you file the bankruptcy petition.
I Have my Credit Counseling Certificate—Now What?
Your attorney will file the credit counseling certificate along with your bankruptcy petition, as proof that you have observed the pre-filing requirement.
Are There Exceptions?
There are very limited exceptions to the credit counseling requirement, and these are strictly prescribed by statute.
Bankruptcy court judges have little or no authority to waive the credit counseling requirement.
If for some reason you think you may not be able to complete the credit counseling requirement, speak with your bankruptcy attorney far in advance of your planned filing date to see whether or not you might fall under an exception and what documentation might be required.
Is This the Same Thing as the “Debtor Education” Course?
No, the Credit Counseling Briefing and the Debtor Education Course are two completely separate programs with separate certificates. However, you must successfully complete both if you are to receive a discharge in your bankruptcy filing.
The Credit Counseling Briefing is done before bankruptcy filing, while the Debtor Education Course takes place after filing, but before discharge.