The Credit Counseling and Debt Management Requirements In Bankruptcy
There are two courses required in the bankruptcy process. The first course is called Credit Counseling and must be completed before you can file for bankruptcy. This course takes approximately one hour to one and a half hours to complete. This course can be taken over the phone or online. When you have completed this course you receive a completion certificate. This completion certificate must be attached to your Bankruptcy Petition when you file for bankruptcy.
If you do not have a completion certificate attached to your Bankruptcy Petition, the Bankruptcy Court will dismiss your case. The United States Bankruptcy Code, which was enacted into law by Congress, requires the Bankruptcy Court to dismiss your case if you do not have a completion certificate attached to your Bankruptcy Petition.
Your credit counseling course focuses on a discussion of alternatives to bankruptcy. Even if you know that bankruptcy is the best option for you, you must still participate in this portion of the Credit Counseling course. In this course you also discuss your budget with a credit counselor, and discuss the types of debts you have and roughly the amounts. The counselor discusses with you ways to increase income and decrease expenses in the future.
The second course is called Debt Management and must be completed after your case is filed. This course takes approximately two hours to complete. This course can also be taken over the phone or online. When you have completed this course you receive a completion certificate. You must complete this course before you can receive your discharge. The discharge is the part that eliminates your debts.
You can do everything else required of you by the Bankruptcy Court and the Trustee appointed by the Court to administer your case, but if you do not complete your second course you will not receive a discharge of your debts. The United States Bankruptcy Code, which was enacted into law by Congress, requires the Bankruptcy Court to close your case without issuing a discharge of your debts if you do not file a completion certificate to the Court indicating that you completed your second course.
Your debtor education course focuses on how to use credit more carefully moving forward, and how to manage your funds more effectively in the future. Even if your bankruptcy was caused by factors beyond your control such as illness, loss of job, etc you must still participate in this portion of the Debtor Education course. In this course you also discuss your budget with a credit counselor, and how to avoid having to file for bankruptcy again in the future.
The above information is a general overview and is not intended to be used as legal advice. If you are considering filing for bankruptcy, the best thing to do is call our office at 248-557-3645 and schedule a free consultation so you can receive advice which is tailored to your specific circumstances.
By: Michael Benkstein, Esq.
Managing Attorney, Bankruptcy Department
The Law Offices of Joumana Kayrouz, PLLC