Credit Counseling Prerequisite for Personal Bankruptcy Filing

Debtors Must Receive Counseling Prior to Bankruptcy Petition

If you’re struggling to make ends meet because you’ve lost your job, incurred substantial out-of-pocket medical expenses, or gone through a divorce, you might consider bankruptcy filing as a way to get a fresh start. The daily stress may give you thoughts of contacting an attorney today and getting your petition filed tomorrow, but that’s unlikely to happen. First, your attorney will need to gather all relevant information to prepare your petition. More important, though, bankruptcy law requires you to complete pre-filing credit counseling.

The Credit Counseling Requirement

Before you can submit a petition to the bankruptcy court, you must complete credit counseling with an approved non-profit agency. The counseling must be completed within 180 days of the filing of your bankruptcy and may be done in person, by phone, or online. You will receive a certificate of completion from the agency and must provide that to the court within 15 days of your bankruptcy filing. If you don’t provide the certificate, your bankruptcy will be dismissed.

Exceptions to the Pre-Filing Credit-Counseling Mandate

Bankruptcy law provides a few exceptions to the requirement. You need not complete credit counseling before filing if any of the following apply:

• Your petition needs to be filed immediately to avoid large losses, such as a sheriff’s sale on property or garnishment of your wages. This is the so-called “exigent circumstances” exception.
• The trustee concludes that there are no credit-counseling agencies available to you. This is highly unlikely, given that you can complete the counseling by phone or online, so you don’t need to live within a reasonable distance of an approved credit-counseling agency.
• You have a medical condition that makes it physically impossible for you to participate in credit counseling.
• You have a mental or psychological condition that prevents you from making rational decisions about finances.
• You are on active duty in a combat zone.

Contact Attorney Howard N. Sobel

At the office of Howard N. Sobel, we work closely with people in New Jersey in personal bankruptcy filings. Contact our office online or call us at 856-424-6400 to set up a free initial consultation (on selected cases). We are currently available by phone, text message, or videoconference only. Evening and weekend appointments can be arranged upon request. We accept all major credit cards.

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