The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 mandated that anyone who is considering filing bankruptcy must take an approved credit counseling course before filing. This requirement must be fulfilled prior to filing and typically, an agency will provide you a certificate that is valid for 180 days after you take the course. Primarily, these courses are required to ensure that you understand the potential options to filing bankruptcy and to ensure that you also understand the ramification of filing Chapter 7 bankruptcy. Your Kennesaw bankruptcy attorney can help you identify which agencies are approved for this course.
Explain the Credit Counseling Requirement
In general, the typical counseling session will last approximately one to one and a half hours. In some instances, these sessions may be offered by phone. In general, the cost of the course is approximately $50 for most agencies. As a Kennesaw bankruptcy attorney we have learned that these “pre-bankruptcy” sessions include an evaluation of your current financial situation, a discussion about whether or not bankruptcy alternatives are feasible and they may also help you develop a personal budget. In some cases, creditor counselors may offer you a plan to help you repay your debt based on your current income and assets. While you are not required to pursue the options they present, make sure you advise your Kennesaw bankruptcy attorney about any plan that is offered as the plan may need to be filed with your bankruptcy petition.
Post-Bankruptcy Counseling Also Required
Many who are considering working with a Kennesaw bankruptcy attorney believe that once they complete the pre-bankruptcy debt counseling they are all set and just have to have their bankruptcy discharged. However, this is not the case; whether you file Chapter 7 bankruptcy or Chapter 13 bankruptcy, you will also have to have what is known as pre-discharge counseling. During this course, attendees will be learning the points of personal financial management to help them better manage their finances after bankruptcy. The company that gives the training will provide you with Official Form 23 which must be provided to the bankruptcy court. For Chapter 7, this form must be filed no later than 45 days after a creditors hearing and for Chapter 13 it must be filed no later than the last plan payment date.
Exceptions to the Counseling Rule
There are some exceptions to the rule for required counseling but most debtors will be unable to meet the high ceiling that is set to obtain that exemption. For example, active military personnel are exempt from counseling but only if they are in a combat zone. Debtors who are developmentally challenged may also be exempt from the counseling requirement; the one loophole that many debtors can use however is if they are filing to prevent foreclosure or wage garnishment, the requirement may be waived with an understanding counseling still be completed.
If you are considering filing bankruptcy and are uncertain where to find the required credit counseling, consider contacting Roger Ghai, a bankruptcy attorney in Kennesaw at the Law Offices of Roger Ghai at (770) 792-1000 for help. I can help you identify the proper agency and ensure that your bankruptcy filing is ready to file as soon as the counseling is completed.