Credit Counseling Requirements in Bankruptcy

If you are planning to file a Chapter 7 or Chapter 13 bankruptcy, you must complete two court-approved courses:

1. A court-approved pre-petition credit counseling course no more than 180 days before your bankruptcy filing. 
2. A court-approved post-petition financial management course must be completed within 45 days after your § 341 Creditor’s Meeting.

If your case is filed without proof of completing the credit counseling course, you must file proof of completion within 15 days, or your case will be dismissed. Failure to take both of these courses in a timely manner will result in the dismissal of your case or the denial of your discharge. However, a debtor may request permission from the court to extend these deadlines if exigent circumstances exist that make it impossible to complete the course by the prescribed deadlines.

Both the credit counseling course and financial management course are offered by a number of agencies and organizations. Courses may be completed on-line, over the telephone, and in person. Costs range from approximately $25.00 to $50.00 per course. Many courses offer significant discounts if you purchase both the pre-petition credit counseling and post-petition financial management courses as a package in one transaction. I advise nearly all of my clients to go this route.

If you are married and filing a joint petition, you and your spouse can take the course together. Many providers offer a joint fee, and will allow you to save on both the cost of having to purchase two separate courses, and the time of having to complete the courses separately.

There are exceptions to the credit counseling and financial management course requirements. If you are disabled, and the nature of your disability prevents you from completing the course, the requirement may be waived with permission of the Bankruptcy Court. Similarly, if the debtor lacks the requisite mental capacity to understand the nature of the information provided in the course, the requirement may be waived. Finally, military debtors in active service in a designated combat zone are not required to complete the course.

A list of Massachusetts approved credit counseling and financial management agencies is provided here.