In order to file either a Chapter 7 or a Chapter 13 bankruptcy, one must take a credit counseling class before filing for bankruptcy. This class is often referred to as the “pre-filing counseling course.” If a couple is filing a joint bankruptcy, both spouses must take this class prior to filing their bankruptcy case. There are numerous organizations that offer this class. It can be done in person or over the phone but is usually done online. This class takes about one hour to complete. There is a small cost associated with taking this class (usually between $25 and $50). Fortunately, if a joint couple signs up for the class together, many class providers charge the same fee for single class takers.
This class must be taken within 180 days before filing for bankruptcy. Once the class is completed, a certificate of completion is faxed or emailed to the individual. This certificate of completion is time stamped with the date and time that the class was completed. This certificate needs to be filed with the Bankruptcy court when one files bankruptcy. The time stamp on the certificate needs to show a time and date that is prior to filing of the case or the case will be dismissed.
After the debtor files the bankruptcy case, the debtor is required to take a second class in order to get a discharge in the bankruptcy case. This class is often referred to as a “pre-discharge” class or the “Personal Financial Management Course.” This class usually takes about two hours and can usually be taken through the same providers who offer the pre-filing class.
In Chapter 7 cases, this class needs to be taken (1) after the debtor files the bankruptcy petition and (2) within 45 days of the Meeting of Creditors (the 341 Meeting). In Chapter 13 cases, this pre-discharge class needs to be taken (1) after the debtor files the bankruptcy petition and (2) no later than the last payment that the debtor is required to make under the individual Chapter 13 plan.
If the debtor fails to take this class on time and file the certificate of completion with the Court, the debtor will not get a discharge in the bankruptcy case. This means that the case will be closed and the debtor will not get any relief from the debtor’s creditors. Some judges allow Chapter 7 cases to be re-opened in order to file this certificate, but this is a costly endeavor as there is a separate filing fee to file this type of motion. Taking this second class is essential to getting the debtor’s discharge and is a very easy step that should not be overlooked.