Beginning in October 2005, everyone filing for bankruptcy must go through a government-approved credit counseling program before filing bankruptcy.
Who Must Complete the Credit Counseling Course?
Generally speaking all individuals filing for bankruptcy must complete the credit counseling course. Whether you are filing for bankruptcy under chapters 7, 11, 12, or 13 the course is still required. Additionally, if you are married, both you and your spouse must complete the credit counseling. If you do not take the class prior to filing the bankruptcy your case will be dismissed.
There are three exceptions to the rule general rule that everyone must complete the credit counseling course and they are:
(1) incapacity where the person is so impaired by reason of mental illness or deficiency that the individual is incapable of making rational decisions, (2) disability where the person is so physically impaired that the individual is unable, after reasonable effort, to participate in an in-person, telephone, or Internet briefing session, and
(3) active military duty in a military combat zone.
How is the class completed?
The agency must be a nonprofit budget and credit counseling agency that has been approved by the United States Trustee Program. www.usdoj.gov/ust – including inquiries about fees, counselor training, and services offered.
Most people now complete the course online. However, it can also be completed over the phone if that is more convenient for you (though it costs a few dollars more). The course itself takes roughly 90 minutes to complete, depending on your personal speed. Typically the class ranges from $25 to $40 depending on whether it is done online or over the phone.
After completing the credit counseling class the company will generate a certificate as proof of you having taken the course. This certificate will be filed along with your Petition and Schedules.
When does the class need to be completed?
The credit counseling course must be completed BEFORE the bankruptcy is filed, however, it must be done within a 180-day period before filing for bankruptcy. So don’t take the class too early or else you’ll have to do it again.