The Credit Counseling Requirement Tied to a Personal Bankruptcy Filing

October 15, 2020 By: Carrie Weir

Credit Counseling Must Be Completed Before You File

You’re struggling to make ends meet, whether because you’ve been laid off, incurred medical expenses, gone through a divorce, or experienced other financial hardship. You can get immediate relief by filing for protection under Chapter 7 or Chapter 13, right? Not quite so fast.

Before you can file a petition for personal bankruptcy protection, you must go through counseling with an approved non-profit credit counseling agency to determine whether you can reasonably manage your debt outside of bankruptcy. The credit counseling must be completed within the 180-day period preceding the filing of your bankruptcy petition. When you file, you must provide the bankruptcy court with your certificate of completion of credit counseling, or your petition will not be accepted. The certificate must be delivered to the court within 15 days of your bankruptcy filing.

Exceptions to the Credit Counseling Prerequisite

There are a few limited exceptions to the pre-filing credit counseling requirement:

• The bankruptcy trustee determines that no credit counseling is available in your district—This rarely happens, as counseling typically can be done over the phone or online, as well as in person.
• You had to file immediately to avoid substantial losses, such as wage garnishment or loss of property at a sheriff’s sale—With this exception, you are still required to complete credit counseling within 30 days of filing.
• You have a disability, mental illness or other condition that prevents you from making rational decisions about your financial condition—This exception also applies if you have a condition that prevents you from obtaining counseling over the phone or online.

Contact an Experienced Rockwall, Texas, Bankruptcy Attorney

At the Law Offices of Carrie Weir, all potential clients are entitled to a free initial consultation. I am currently communicating with clients by phone, text message, and videoconference. To arrange an appointment, contact my office online or call 972-772-3083. I handle Texas personal bankruptcy filings in Rockwall County, Collin County, Dallas County, Hunt County, and the surrounding counties.