As a Troy, Ohio bankruptcy attorney, I often find that potential clients do not understand bankruptcy counseling requirements. With very few exceptions, anyone who is filing Chapter 7 or Chapter 13 bankruptcy must participate in both pre-bankruptcy counseling and pre-discharge counseling. The exceptions are:
- Active military service member in combat zone
- Emergency filing to stop foreclosure or wage garnishment
- Mental incapacity (cannot understand counseling)
- Counseling not available within five days of request
Because counseling is widely available by telephone and over the internet, there are very few exceptions granted for physical disabilities.
What is pre-bankruptcy counseling?
When the bankruptcy laws were modified to prevent abuse, one of the steps that were taken was to require debtors to take a counseling course before filing bankruptcy. This course is designed to inform a debtor of their options. In most cases, the counseling agency will help debtors prepare a budget; the goal is to see if Chapter 13 is possible. Once a debtor has filed bankruptcy, they must provide the court with a certificate of completion not later than 15 days after filing. Credit counseling must be from an agency approved by the U.S Trustee’s office and completed within a 180-day period prior to filing bankruptcy.
What is post-bankruptcy counseling?
Before a Chapter 7 or Chapter 13 bankruptcy may be discharged, the debtor must complete a second counseling session. This course is commonly known as a “personal financial management course” and must last a minimum of two hours. Like the pre-bankruptcy counseling, it must be administered by an agency approved by the U.S. Trustee’s office. The timing is also important: Chapter 7 filers must present the proof of attendance (by presenting Form 23) no later than 45 days after the creditor’s meeting. Chapter 13 filers must present the confirmation before making the last plan payment.
Residents of the Troy, Ohio area who are considering filing bankruptcy should contact the Chris Wesner Law Office, LLC. We can help ensure you are in compliance with all counseling requirements.