A CERTIFICATE OF CREDIT COUNSELING MUST BE OBTAINED PRIOR TO FILING BANKRUPTCY
The Bankruptcy Code requires a person to obtain a certificate of credit counseling prior to the filing of any bankruptcy petition. This certificate must be obtained within 180 days or 6 months prior to the petition filing date from an approved nonprofit budget and credit counseling agency. The statute actually reads that the briefing must be obtained during the 180 day period ending on the date of the filing of the petition. A more careful reading of the statute actually permits the briefing to be obtained on the date of the filing. This would permit the briefing to be obtained on that date even if the bankruptcy petition was filed earlier in the day. This would apply to the typical situation where a person had a sheriff sale and filed on the date of the sheriff sale to prevent the sheriff sale from taking place, but did not obtain the counseling briefing until later that day. As a precautionary measure, it most likely would be better to obtain the certificate prior to any bankruptcy filing. This counseling requirment can be fulfilled through a variety of channels. Most agencies can provide counseling online over the Internet or telephone, then there is the in-person briefing that is an option. The local credit counseling agency in the Pittsburgh area is Advantage Credit Counseling located at 2403 Sidney Street, Suite 400, Pittsburgh, PA 15219, which may be contacted at 1 (866) 699-2227. A lot of credit counseling courses intially cost around $50.00, but today you can obtain certificates at very low costs between $10.00 to $20.00. The agency must actually waive its' fee for any individuals that meet certain income requirements, who are unable to pay. The income threshold is currently if a person's household income is less than 150% of the poverty guidelines. Depending on the particular circumstances, any briefing can be obtained rather quickly. A typical counseling session last about an hour. During the session the agency will prepare a budget to review the debtor's income and expenses. The idea behind preparing a budget is to determine whether there are any other reasonable options besides filing bankruptcy that are available to such person. Generally, the agency comes to the conclusion that there are no other options available to such person other than the filing for bankruptcy relief. Therefore, the failure to obtain the required briefing prior to any bankruptcy filing will usually result in the dismissal of the case.
EXCEPTIONS TO THE CREDIT COUNSELING REQUIREMENT THAT MAY PERMIT THE BANKRUPTCY COURT TO WAIVE THE REQUIREMENT
There are a few exceptions to the credit counseling requirement, which permits the court to waive the requirement. The first is to be incapacitated. The Bankruptcy Code defines incapacity as being so impaired due to a mental illness or mental deficiency as to be unable to realize and make rational decisions regarding financial responsibilities. The second exception is to be considered disabled. Disabled is defined as being so physically impaired as to be unable to participate in an in-person, online or telephone briefing, after a person has made reasonable efforts to do so. In order to fall within the exemption, the debtor needs to prove the following: 1) the debtor is severely physically impaired; 2) the debtor has made a reasonable effort, despite the impairment, to participate in the prepetition credit counseling; and 3) the debtor is unable because of the impairment to participate meaningfully in the prepetition course in an in-person, telephone or Internet brifing. The third exception is to be on active military duty in a combat zone.
BEWARE THAT YOU MUST NOT ONLY COMPLETE THE COURSE BUT SUBSEQUENTLY CONTACT THE COUNSELOR!
A person should be aware of the fact that even though they may have completed counseling over the Internet or an automated telephone recording, the counseling is not deemed to have been completed until the debtor has had some type of live interaction with a counselor, whether that be by telephone, live chat or email following the automated portion of the session. Otherwords, it will be necesssary to contact a counselor after you have finished taking the course.
Upon completing the credit counseling requirement, then the certificate must be filed with the Court. Either the document can be filed at the time the bankruptcy petition is filed or within the following 14 days.
AFTER YOUR BANKRUPTCY HAS BEEN FILED, THE DEBTOR MUST OBTAIN A CERTIFICATION FROM A PERSONAL FINANCIAL MANAGEMENT COURSE
Once a person has obtained a certificate of credit counseling and filed their bankruptcy petition, an additional certification is required during the bankruptcy process. Just like with credit counseling, any debtors filing a Chapter 7 Bankruptcy or a Chapter 13 Bankruptcy must complete a personal financial management course also known as a debtor education course from an approved provider. This certification can only be obtained after your bankruptcy petition has been filed and is required in order to receive a discharge.
IN A CHAPTER 7 BANKRUPTCY THE DEBTOR MUST OBTAIN A CERTIFICATE FROM A PERSONAL FINANCIAL MANAGEMENT COURSE WITHIN 60 DAYS OF THE FIRST SCHEDULED MEETING OF CREDITORS
The time period in which to file the certification from the financial management course in a Chapter 7 Bankruptcy case is no more than 60 days after the first date set for the meeting of creditors. It should be noted that the certification has to be obtained from the scheduled date of the first meeting of creditors, as opposed to the date of any rescheduled meeting. The deadline to obtain the certification may be extended by the Court for cause. However, such request for extension must be filed prior to the expiration of the sixty days. If the debtor does not obtain the required certification, then the court will close the case without discharge. This does not mean that your case has been dismissed, but that you will not receive a discharge. In order to receive a discharge this will mean that it will be necessary to file a new bankruptcy.
IN A CHAPTER 13 BANKRUPTCY THE DEBTOR MUST OBTAIN A CERTIFICATE FROM A PERSONAL FINANCIAL MANAGEMENT COURSE PRIOR TO THE DATE THE LAST PAYMENT IS DUE
A personal financial management certification must also be obtained in a Chapter 13 Bankruptcy. This certification must be obtained no later than the date that the last payment is made pursuant to the Chapter 13 Plan. The debtor can take it earlier during their bankruptcy, but there is not the 60 day requirement like in a Chapter 7 Bankruptcy. This course is primarly designed to assist the debtor in coping with his or her future financial situation by developing a budget.
EXCEPTIONS TO THE REQUIREMENT OF OBTAINING A CERTIFCATE FROM A PERSONAL FINANCIAL MANAGEMENT COURSE
Similar to the credit couseling requirements, there are limited exceptions for debtors that are unable to complete the personal financial course due to a disability or incapacity or who are on active military duty in a combat zone. In order to fall within the exemption or to obtain a waiver with respect to being disabled three items need to be shown: 1) the debtor is severely physcially impaired; 2) the debtor has made a reasonalbe effort, despite the impairment, to participate in the instructional course concerning personal financial management; and 3) the debtor is unable because of the impairment to meaningfully participate in the required instructional course in an in person, telephone or Interent briefing.
Listed below are just a few lower priced agencies.
www.summitfe.org 1 (800) 780 5965
www.AccessBK.org 1 (800) 210-0522
www.ccadvising.com 1 (855) 980-6690
www.beadviser.com 1 (855) 976-1700
www.PreBk.com 1 (844) 599-9689
www.bothcourses.com 1 (855) 313-4527
EXPERIENCE COUNTS WHEN SELECTING A BANKRUPTCY ATTORNEY
Attorney Rodney Shepherd can offer his experience regarding filing bankruptcy and help you through the process. Attorney Shepherd is licensed to practice in all Pennsylvania Courts, including the Supreme Court. He is also a member of the National Association of Consumer Bankruptcy Attorneys. If your are interested in filing bankruptcy or simply have any questions about possibily filing, then call Pittsburgh Bankruptcy Attorney Rodney Shepherd at 412 471-9670 or fill out our contact information form to schedule a free consultation.