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Do I Have to Take a Credit Counseling Class Before Filing Bankruptcy?

Norma Duenas

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Chapter 13 Bankruptcy Articles | Learn About Chapter 13

Do I Have to Take a Credit Counseling Class Before Filing BankruptcyIf you have decided to file for bankruptcy you need to know the steps you need to take to file your case. One of these steps is completing a credit counseling class. Amendments to the bankruptcy code in 2005 made it a requirement to complete a credit counseling class prior to filing your Chapter 7 or Chapter 13 bankruptcy case.

What is a Credit Counseling Class?

A credit counseling class is  intended to provide you with an evaluation of your financial situation and a budget analysis. The pre-bankruptcy counseling class will generally review your debt, income, and household expenses to provide you with a budget analysis. Through this process the counselor may discuss problem and issues with your household budget.  The credit counseling class can be completed online or over the phone and lasts on average between 1 hour to 1.5 hours. You will have to verify your identify as part of completing your class.  Once you have completed your course,  you will be issued a credit counseling certificate that will be filed in your bankruptcy case..

When Do I Need to Complete the Class?

The class needs to be completed prior to the filing of your bankruptcy case. There are a few exceptions where the class can be completed after filing.  The class must have  been completed within 180 days prior to your case being filed. Failure to complete the class prior to filing may result in your case been dismissed.

How Much Does it Cost ?

Credit counseling classes vary in cost depending on the company providing the services. They generally tend to average around $10 to $50.  The U.S. Trustee’s office provides a list of organizations that have approved credit counseling classes. You can locate an approved class in your state by going to: https://www.justice.gov/ust/eo/bapcpa/ccde/cc_approved.htm

Who Does not Need to Complete a Credit Counseling Class?

The bankruptcy code provides exceptions for certain individuals who are not required to complete a credit counseling class prior to filing their bankruptcy case.  If you meet any of the below requirements then you will not need to complete the class:

  • Exigent Circumstances– Submitting to the court a certification that describes exigent circumstances that would provide a valid basis for waiving the requirement, and states that the debtor requested the service but was unable to obtain the services for a period of 5 days after making the request. What will be considered exigent circumstances will depend on the situation and facts.  Some debtors have successfully argued exigent circumstances due to an pending foreclosure.

Temporary Waiver of Class?

You can have the requirement temporarily waived due to exigent circumstances. If the court finds that you meet the requirement then you will have 30 days from the date of filing your bankruptcy petition to complete your credit counseling class. You will need to show exigent circumstances by:

  • Exigent Circumstances– Submitting to the court a certification that describes exigent circumstances that would provide a valid basis for waiving the requirement, and states that the debtor requested the service but was unable to obtain the services for a period of 5 days after making the request. What will be considered exigent circumstances will depend on the situation and facts.  Some debtors have successfully argued exigent circumstances due to an pending foreclosure.

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