Under the recent changes made to the U.S. Bankruptcy Code, a party or parties filing for bankruptcy under any of the bankruptcy chapters must attend pre-filing bankruptcy credit counseling, and later, financial management counseling. Below is information discussing the credit counseling and financial management counseling requirements:
Credit Counseling as a Precondition of Bankruptcy Filing.
1. An individual is not eligible for relief under any chapter of the Bankruptcy Code unless, within 180 days of the bankruptcy filing, the debtor received "an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis" from an approved nonprofit budget and credit counseling agency. 11 U.S.C. § 109(h).
2. Approved credit counseling must satisfy the following requirements:
(1) The counseling may take the form of an individual or group briefing;
(2) Counseling may be conducted in person, by phone, or by internet;
(3) Counseling must be provided by an approved nonprofit budget and credit counseling agency;
(4) Counseling must outline available credit counseling opportunities and performs a budget related analysis.
3. At the time of the petition filing, the credit counseling requirement may be waived for 30 days if the debtor certifies that:
(1) There were exigent circumstances that justify waiver;
(2) The debtor requested credit counseling services from an approved agency but could not obtain counseling within 5 days of the date of the request; and
(3) The court approves the waiver request. 11 U.S.C. §109(h)(3)(A).
The waiver, upon approval by the court, may be extended for an additional 15 days for a total of 45 days after the date of the filing of the petition.
4. The credit counseling is not required is not required if the debtor lives in a district for which the United States trustee determines that approved credit counseling agencies are not reasonably able to provide adequate services for debtors seeking bankruptcy relief. 11 U.S.C. §109(h)(2)(A).
5. The debtor may be completely exempted from the counseling requirement if, after notice and hearing, the court determines that the debtor is unable to complete the requirements because of incapacity, disability, or active military duty in a military combat zone. 11 U.S.C. §109(h)(4).
6. Proof of credit counseling and budget analysis.
11 U.S.C. §521(b) requires the debtor to file with the petition:
(1) Certification from the approved credit counseling agency that describes the counseling provided to the debtor; and
(2) Copy of the debt repayment plan proposed by the agency, if any.
Financial Management Counseling as a Requirement for Discharge.
1. A debtor may not obtain a discharge of debts in either a Chapter 7 or a Chapter 13 case unless the debtor completes an instructional course concerning personal financial management. 11 U.S.C. §727(a)(11), §1328(g)(1).
2. For purposes of receiving a discharge, the instructional course on personal financial management must be approved by the United States trustee. 11 U.S.C. §111(a)(2).
3. The approved course on personal financial management may be offered either by an approved budget and credit counseling agency or other provider approved by the United States trustee. 11 U.S.C. §111(b)(1).
4. The requirement of a course on personal financial management may be waived if the debtor lives in a district for which the United States trustee determines that approved credit counseling agencies are not reasonably able to provide adequate services for debtors seeking bankruptcy relief. 11 U.S.C. §727(a)(11).
5. The requirement of a course on personal financial management may be waived if, after notice and hearing, the court determines that the debtor is unable to complete the requirements because of incapacity, disability, or active military duty in a military combat zone. 11 U.S.C. §727(a)11), §1328(g)(1).
6. Proof of completion of the course on personal financial management. The statute does not specify how the debtor must prove that he or she has satisfied the requirement of completion of a course on personal financial management.
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