Bankruptcy Filing Debtor Education and Credit Counseling Certificates late
Since 2005 Congress has required consumer debtors to attend a credit counseling class before they file. They also must attend a Debtor Education class after they file to get the discharge. Our office can easily prepare a petition with just the income Information. However, we cannot file the petition without the credit counseling certificate.
Both courses take about 2 hours to complete. Each district approves providers. The prices vary from about 10 dollars for the cheapest services to about 50 for the most expensive. If you are filing under emergency conditions, the more expensive providers provide certificates immediately.
Some providers will issue certificates 24/7 and others are open only at limited times. www.bkcert.com is open 24/7, answers on the second ring and is open 24/7. Others may be located in countries like Pakistan and may have problems communicating with you outside their web-based software.
The statute reads if you don’t take the course before filing the court must dismiss the case. Exigent circumstances such as a soldier serving in combat may excuse you from taking the class before filing. But it is very rare to qualify for the exigent circumstance exemption. These are our preferred classes.
The statute is just as unforgiving if you fail to take the second course the “Debtor Education” course. Often debt management agencies operate the Credit counseling courses in hopes of talking clients out of filing bankruptcy. These agencies attempt may attempt to hijack someone and attempt to sell them on debt counseling which has a high failure rate.
Filing your credit counseling Certificate late
If you file the credit counseling certificate late the court must dismiss your case. There is little or no choice for the court. In 30 years we have not had one client which qualified for the exigent circumstances. The exigent circumstances exemption or waiver to this is found in 11 USC § 109(h)(3)(B). The court has to hold a hearing just to allow the Debtor to take the course after he files his bankruptcy petition. You, therefore, don’t really get a waiver or exemption. You still have to take it later plus you have to go to a hearing where unless you were winning the medal of honor in defense of your country the judge would deny the request.
The consequences of not taking the class and getting your certificate before you file means the case will be dismissed. If you take the course before filing, but file the credit counseling certificate more than three days after the petition the case will probably still be dismissed. However, you can probably file a motion for relief from judgment or a motion to reinstate the petition and have the case reinstated if you just filed the certificate late. Therefore you can recover from filing the certificate late. But it is fatal to file the case without taking the credit counseling first.
The case of Re Moore stated “[BAPCPA] requires debtors to receive credit counseling before they can be eligible for bankruptcy relief so that they will make an informed choice about bankruptcy, its alternatives, and consequences. ” In re Moore, 359 B.R. 665, 673 (Bankr. E.D. Tenn. 2006). This 2005 piece of legislation makes it harder to file bankruptcy and forces consumers to produce documents while businessmen are excused from this.
Filing your Debtor Education late
The Debtor Education certificate is required to obtain the discharge. If you only needed to file a Chapter 13 to save the home you may not need the discharge. If your Chapter 13 repaid 100% of your debts, you might not need to take or file the Debtor Education certificate. When you fail to file the Debtor Education certificate on time, you will have to pay the filing fee a second time and file motions to reopen the case.
This often costs 600 dollars or more. A 300 dollar filing fee plus 300 or more in attorney fees. This is a huge incentive to file this as soon as you can immediately after the case is filed.Almost all of the services automatically file the Debtor Education certificate as soon as you complete the training. The training takes 2 hours, and often sections of the course are timed. You may read the section and complete it early. But you may have to look at a screen while the clock ticks away and time expires for whatever section you are working on.
When Congress required debtor education, it considered and believed bankruptcy was often caused by a lack of financial education. Congress ignored consumer bankruptcy cases are primarily caused by death, disability, and employment discharges. Congress indicated financial education was a fundamental goal. The Congressional Record stated “‘personal finance curricula be developed for elementary and secondary education programs.” . . . If we teach our children, early-on, how to manage money, credit, and debt, they can become responsible workers, and heads of households.”