Credit Counseling Requirement

If you’ve spoken with a bankruptcy attorney or done any research on your own, you know that the 2005 amendments to the Bankruptcy Code added a counseling requirement. What does the counseling requirement involve?

The Bankruptcy Code requires debtors to complete two counseling sessions. Upon finishing each, you will receive a certificate of completion. For the sake of efficiency, ask the counseling agency to email the certificate directly to your attorney. Think of the first certificate as your ticket into bankruptcy. Without it, you cannot file. The second certificate is your ticket out of bankruptcy. Without it, you won’t get your discharge. Most agencies will allow you to complete both sessions online or over the phone.

The First Counseling Session (Pre-filing counseling)
In this session, you will be asked about your income, expenses, and debts. A debt repayment plan may be prepared, but you will not be obliged to follow it. The session usually lasts 45 – 90 minutes. It must be completed within 6 months prior to filing your bankruptcy petition and schedules.

The Second Counseling Session (Pre-discharge counseling or Debtor Education)
You must complete this session AFTER filing for bankruptcy. You will need to provide your bankruptcy case number, which your attorney should give you shortly after filing your case. Instead of answering questions about your budget, you will listen to a series of short talks about financial management. At the end, you will take a brief quiz. Don’t worry, if you don’t pass, it won’t cost you extra to try again. This course and the quiz will usually last 2 – 3 hours and should be completed within 6 weeks after filing your bankruptcy petition and schedules.

Two separate counseling sessions, taken at two separate times, with two separate certificates for two separate purposes. Your bankruptcy attorney can answer any specific questions you have about credit counseling.

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