READ THIS BEFORE YOU FILE YOUR CASE!
I. THE PREPETITION CREDIT COUNSELING REQUIREMENT
With exceptions almost never applicable, to be eligible to file a bankruptcy case, you must have completed credit counseling within the 180-day period from an approved credit counseling agency before filing your petition, or your case will be dismissed. See 11 U.S.C. § 109 (h)(1) (section 109 (h)(1) of the Bankruptcy Code (title 11, U.S. Code), a copy of which may be examined at the Clerk’s Office).
If your case is dismissed for lack of prepetition credit counseling, you will not receive a discharge of your debts.
If you refile for bankruptcy within one year after dismissal, protection from your creditors under the Bankruptcy Code’s automatic stay may be limited to thirty (30) days after filing the new case.
Except in very limited circumstances, you cannot obtain an extension permitting you to obtain the required credit counseling after the filing of the case. More information about the requirements for an extension is below.
More information about how to obtain credit counseling is below.
II. TEMPORARY WAIVER OF THE CREDIT COUNSELING REQUIREMENT
A debtor may be entitled to a temporary waiver of the credit counseling requirement, which would permit completion of credit counseling after filing the petition, but only in very limited circumstances. See 11 U.S.C. § 109(h)(3)). Most debtors will not be able to meet these conditions.
In order to qualify for a temporary waiver, a debtor must satisfy all of the following conditions:
- The debtor must have requested credit counseling from an approved nonprofit budget and credit counseling agency, but was unable to obtain the required services during the 7-day period beginning on the date on which the debtor made that request; and
- Exigent (emergency) circumstances must exist that the court determines merit a waiver of the prepetition credit counseling requirement; and
- The debtor must file a certification stating the facts regarding the conditions listed above in paragraphs (1) and (2) with the petition, and the certification must be satisfactory to the court.
If you file your petition without having first obtained credit counseling, and you do not qualify for a temporary waiver, your case will be dismissed. The Clerk (and the judge and his chambers staff) cannot provide legal advice or predict in advance how a judge will decide your request for an extension to complete credit counseling.
III. OBTAINING CREDIT COUNSELING
You can obtain a list of U.S. Trustee approved credit counseling agencies from the Clerk’s Office or from the U.S. Trustee website.
The Federal Trade Commission's Before You File for Personal Bankruptcy: Information About Credit Counseling and Debtor Education provides additional information about how to obtain credit counseling. Free credit counseling may be available.
- You may conduct the counseling on a computer. If you do not have a computer, you may be able to use a computer at your public library.
- You may also obtain the counseling by telephone, or in person.
- Take credit counseling from a U.S. Trustee approved credit counseling agency and tell the agency that you need the counseling for purposes of filing a bankruptcy case.
- Ask the credit counseling agency for a certificate describing the services provided to you and a copy of any debt repayment plan developed through the agency. You will need to file those in your bankruptcy case. See 11 U.S.C. 521(b).
- The safest way to be sure you received the correct credit counseling is to obtain a certificate before you file your bankruptcy case. The certificate should be on a form like this Example of Credit Counseling Certificate.
- Verify that your certificate reflects that you received credit counseling within 180 days before you file your petition. If you received credit counseling more than 180 days before you file your petition, that credit counseling is too old and will not satisfy the statutory requirement.
- Some courts interpret the general statutory requirement in 11 U.S.C. § 109(h)(1) that the debtor have obtained credit counseling “during the 180-day period preceding the date of filing of the petition” as meaning that credit counseling obtained on the day of filing the petition does not satisfy the requirement (even if the counseling preceded the filing of the petition).
- If you obtained “debtor education” from an approved debtor education provider, that is not the same thing as prepetition credit counseling.
IV. EXEMPTION FROM THE CREDIT COUNSELING REQUIREMENT
There are exemptions from this requirement available for persons who are mentally ill, disabled or on military duty in an active combat zone. See 11 U.S.C. § 109(h)(4).