All bankruptcy debtors—whether they are filing a Chapter 7 or a Chapter 13 case—must complete a mandatory credit counseling course within 180 days prior to filing for bankruptcy. This requirement is separate from the debtor education requirement that must be fulfilled after bankruptcy.
The Purpose of the Credit Counseling Course
The credit counseling course will involve examining your income and expenses to determine if bankruptcy is the right choice for you. This requirement is designed to both safeguards the bankruptcy process, your creditors, and you.
If you can pay off your debt without filing bankruptcy, you can avoid the costs of bankruptcy and any potential damage to your credit rating. You also may want to wait to file bankruptcy until you are sure you need to because a Chapter 7 discharge can only be given once every eight years.
The bankruptcy court may also attempt to dismiss your case or convert it into a Chapter 13 case if your income is too high in comparison to your state median income or the amount of your nonpriority unsecured debt. If you are financially able to pay off your creditors, but just don’t want to, the court will most likely deny your Chapter 7 filing. Your credit counseling course can give you an idea of whether the bankruptcy court is likely to approve your case.
How to Satisfy the Credit Counseling Requirement
You must receive a certificate of completion from a credit counseling program that is certified by the U.S. trustee program. You must file this certificate, along with any repayment plan, proposed by the counseling agency. However, you do not need to agree with the agency’s recommendation or follow their plan.
All debtors must take this credit counseling course, even if the debtor’s financial situation is so dire that they know that bankruptcy is their only option. If the agency does recommend that you avoid bankruptcy, you can disregard that advice, but you will have to show the court that your Chapter 7 filing is not abusive. Otherwise, your case may be converted to a Chapter 13 case, which requires the repayment of your debts over three to five years.
For over 35-years we have proudly served the people in Savannah, Richmond Hill, Hinesville, Pooler, Port Wentworth, Tybee Island, Clyo, Ellabel, Midway, Springfield, Pembroke, Brooklet, Garden City, and Ludowici, Georgia.
We are a debt relief agency. We help people file for bankruptcy relief under the U.S. Bankruptcy Code.