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CREDIT COUNSELING AND FINANCIAL MANAGEMENT

Debtors seeking Chapter 7 or Chapter 13 bankruptcy relief must complete both a credit counseling course prior to filing bankruptcy and a personal financial management course post-filing, prior to receiving a bankruptcy discharge.

Credit Counseling

Before you file for bankruptcy protection, you’ll be required to complete a pre-filing credit counseling session with an agency approved by the U.S. Trustee’s office. This course must be taken within 180 days before your case is filed. This requirement is critical whether you file for Chapter 7 or for Chapter 13 bankruptcy. The Credit Counseling Briefing may be completed in person, over the telephone or via the Internet. The session should include an evaluation of your personal finances, discussion of any possible alternatives to bankruptcy and a personal budget plan. The seminar requires only about 1 hour 15 minutes for most people to complete. The cost for the seminar is approximately $40.00 for individuals or for a married couple. The goal is to provide debtors fair and balanced credit and budget counseling in order to determine whether or not filing for bankruptcy relief is the best alternative. Upon a debtor’s decision to file for bankruptcy, a certificate of completion of the program must be filed with the court to prove satisfaction of the requirement. Failing to complete credit counseling and filing the certificate of completion is grounds for dismissal of the debtor’s bankruptcy case.

Financial Management Course

The personal financial management course requirement is different from the credit counseling that you must receive prior to filing for bankruptcy. You must take the financial management course after you’ve filed for bankruptcy but before you get a discharge. In Chapter 7 bankruptcy, you must file Form 23 and the certificate no later than 45 days after the date on which your 341 meeting of creditors was first scheduled. Don’t miss the deadline. If you do, the court might close your case. If that happens, you’ll have to reopen your case (which costs money). In Chapter 13 bankruptcy, you must file Form 23 and the certificate no later than the date on which you make your last plan payment. You can take the course early on in your case, however, and some attorneys recommend this because the course provides information that may help you budget and successfully complete your plan.