Bankruptcy Attorneys Answer Frequently Asked Questions About Credit Counseling Courses In Phoenix
Our Arizona Zero Down Bankruptcy Attorneys discuss additional information about this filing requirement. Since 2005, every bankruptcy filed is required to take a Bankruptcy Credit Counseling Course before a bankruptcy in Arizona can be filed with the bankruptcy court.
Declaring bankruptcy comes with several pros and cons. Discharging debts and the Automatic Stay, which prevents repossessions and garnishments while the bankruptcy is active, are obvious advantages to filing bankruptcy. Some of the disadvantages are the negative mark it will leave on your credit, and the amount of time and effort it takes to draft a petition and complete all the necessary steps. Therefore, our clients are often surprised to learn that in order to file bankruptcy, they will be required to take two credit counseling courses- one before filing, one after the 341 Meeting of Creditors. These credit counseling course came about after the major bankruptcy reform in 2005.
How Do I Find A Credit Counseling Course?
If you retain an attorney to represent you in your bankruptcy, that attorney will likely have a preferred course provider and give you a referral. Most providers offer online courses, so you will need to have internet access to complete your court. If possible, you should take the course on your own device for privacy reasons. Your provider may also offer telephonic courses if internet access is infeasible. If you and your spouse are filing together, you must take the courses together.
You will need to pay a nominal fee- usually between $15 and $30- to take each credit counseling course. The courses will include videos and interactive elements. The course will help you formulate a budget for your finances post-bankruptcy. You will also need to speak to a credit counselor, and this portion will typically only be offered during business hours.
Do I Need To Send My Course Completion Certificate To My Bankruptcy Attorney?
Your attorney may send you a hyperlink to the course so they receive the certificate automatically, or you may need to enter your attorney’s email address during the course registration. If either of these occur, you won’t need to independently send your attorney your certificate after completing the course.
What if I don’t have an attorney, Will there be additional steps that I need to take?
The credit counseling course provider will NOT file your completion certificate with the court for you. You will need to do that, along with every other step of the bankruptcy process, on your own.
How Early Can I Take The First Credit Counseling Course?
Your course completion certificate will be valid for 180 days, or about 6 months after you take it. This means you should wait to take your course until you are fairly certain that you will file. If you wait more than 6 months to file your petition after completing your course, you will need to complete it- and pay for it- again.
Do I Need To Complete The Credit Counseling Course All At Once?
Most courses will let you pause and resume where you left off if you need to take a break, lose internet connection, etc., while taking your course.
Do I Still Need To Take The Course While Filing Chapter 13 Bankruptcy?
Yes, the credit counseling requirement applies to both Chapter 7 and Chapter 13 filers. For both chapters, one course must be completed before the petition is filed, and the other must be taken within 60 days of the 341 Meeting of Creditors.
What Should I Do If I Don’t Like My Credit Counselor?
Credit counselors are supposed to play devil’s advocate, and suggest methods of debt relief besides bankruptcy. You should only have to talk to the counselor for about ten minutes. Many of our clients are discharging well in excess of $10,000 in debt in their bankruptcy. It is better to grin and bear it rather than delay your bankruptcy filing. Your petition can’t be filed without the first course completion certificate, and you won’t receive the protections of the Automatic Stay until your petition is filed.
Can I Fail The Credit Counseling Course?
No, the credit counseling courses are not pass/fail exams. All you need to do is complete the course and the counseling session to receive your completion certificate.
What Information Do I Need To Provide To Take The Credit Counseling Course?
You will need to provide your first name, last name, and the last four digits of your social security number to register for the course. You will be asked to enter information (that will NOT be included in your bankruptcy petition) to create a hypothetical budget based on your income and expenses, but this information is not verified by the course provider.
How Long Will The Bankruptcy Creditor Counseling Courses Take?
The time it takes for you to complete the course will vary depending on factors like your reading speed, internet connection, if you ask the counselor additional questions, distractions in your home, and more. However, you can expect each course to take between 45-90 minutes.
What Should I Do After Completing The Credit Counseling Course?
For both chapters of bankruptcy, you will need to file your completion certificate with the court if you filed pro se. Your attorney will file your certificate on your behalf if you hired one.
For Chapter 7 filers, your case is eligible for discharge 60 days after the 341 Meeting of Creditors. The key word here is “eligible.” Once you have completed your course, you are simply waiting for the court to send your discharge paperwork, but it likely won’t be right on the 61st day. Also, you can expect your discharge to be completed within a few days to few weeks of the eligibility date, depending on how busy the court is.
For Chapter 13 filers, your bankruptcy will last far longer than 60 days after your 341 Meeting of Creditors. At this point, you should be making payments on your plan, which has been confirmed by the court. Additionally, you may need to file for a modification of your plan if you experience a change in income, but otherwise you will simply continue making payments until the plan is completed and your case can be discharged. Chapter 13 bankruptcy lasts 3 years for filers who make less than the state median income, and 5 years for those who make more than that amount.