Debtors who are considering filing bankruptcy need to be aware of counseling requirements. Chapter 7 bankruptcy filers must complete a credit counseling course prior to filing. During this course, the agency providing services will require you to develop a budget and help determine whether you may be eligible to file Chapter 13. However, while the plan must be filed with your bankruptcy filing through the court, you are not required to accept their recommendations.
Pre-Bankruptcy Filing Counseling
Before a debtor can file bankruptcy, they must have completed the initial counseling and provide a certificate of completion to the court. This counseling must be complete within 180 days of filing for Chapter 7 relief. Approved counseling agency lists are available from the U.S. Department of Justice (DOJ); many of these courses may be taken online. The typical course will last approximately 90 minutes and participants are required to take a test after the course. The fees are fairly minimal; approximately $50.
Pre-Discharge Debtor Education
Before the court will discharge your Chapter 7 bankruptcy, all parties to the bankruptcy will be required to take a second course. While the pre-bankruptcy counseling is considered to be credit counseling, this section is considered to be a personal financial management course. Prior to discharging your Chapter 7, the court must obtain the Debtor's Certification of Completion of Instructional Course certificate, known as Form B423.
The decision to file Chapter 7 bankruptcy is never an easy one and new requirements have been put into place to ensure debtors are not abusing the system. Whether you are currently considering filing Chapter 7 or you have completed the required pre-bankruptcy credit counseling course and need to discuss your options with a California bankruptcy attorney, contact the Law Offices of James C. Shields at (310) 626-4404 for a free consultation.