The Credit Counseling Requirement

In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). Among other drastic changes to the Bankruptcy Code (Title 11 of the United States Code) was the requirement that all individual debtors seeking to file bankruptcy under any chapter must complete a pre-filing credit counseling course through a court-approved provider. Likewise, prior to a discharge in bankruptcy, each individual debtor must complete a second financial/budget management course. Both courses are offered online or over the phone.

Debtors rarely have any issues completing either course, and both courses can be had for around $50.00 per individual/couple. The first course must be completed within 180 days of the filing of bankruptcy. While you cannot file a bankruptcy petition without simultaneously filing proof of the completed pre-filing course, completion of the second course can easily be overlooked. For chapter 7 cases, the second course must be completed and proof filed with the Court within 45 days of the date first set for your 341 meeting of creditors. For chapter 13 cases, the course must be completed prior to the debtor's last chapter 13 payment. To ensure that a discharge is entered, the second course should be completed as soon as possible.

If the debtor fails to complete the second financial management course within the times prescribed above, the Court will close the case without a discharge. In order to obtain a discharge at this point, the debtor must reopen the case to file the certificates of completion. The Court fees for reopening a chapter 7 and chapter 13 are $260.00 and $235.00, respectively.