If you are thinking about filing Bankruptcy, it is important to note that there is a credit counseling requirement that must be met.
In accordance with Section 109(h)(1) of the Bankruptcy code, credit counseling must be completed with a non-profit credit agency. The United States Trustee’s Office must approve the agency that you use for credit counseling. Our Chicago bankruptcy attorneys
can make sure that you deal with an approved agency. There is a fee you must pay the agency for credit counseling, but if you cannot afford to pay the fee, a fee waiver may be available with the agency you choose. The credit counseling session usually takes 60-90 minutes
long. It can also take place anywhere convenient for you, from being in person, on the phone, and even online. Once the credit counseling is completed, you will receive a certificate as proof of having completed this requirement. Credit counseling is an important step, as it will provide you with advice on how to avoid getting back into debt in the future. A question always made by potential Bankruptcy filers is by when must the credit counseling requirement be met?
The Bankruptcy code states that the counseling requirement must be completed within the 180-day period ending on the date of filing the petition. There have been issues in the past where Debtors have filed Bankruptcy and completed counseling later that day. Many courts in the past have held that it must be done before you file the Bankruptcy petition. Well, it appears we finally have an answer!
On December 9, 2013, a decision was made by Judge Timothy A. Barnes, of the Bankruptcy Court in Chicago, clarifying the credit counseling deadline. In this case the Debtor filed for Chapter 13 Bankruptcy. Later on that same day, the Debtor obtained credit counseling as required by the Bankruptcy code. The Debtor later filed the certificate of credit counseling demonstrating the completion of the requirement. The issue brought up by the Trustee was if the Debtor had actually met the deadline by completing the credit counseling requirement following the Bankruptcy filing. Judge Barnes ruled that the Debtor was in compliance with the Bankruptcy code’s credit counseling petition. As long as the credit counseling requirement is completed by the end of the day when the petition is filed, the requirement is deemed as met. It is important to note that there are exemptions to the credit counseling requirement. One of the main exemptions is if you are unable to receive credit counseling because you are incapacitated, disabled, or an active military member in the combat zone. It should also be noted that this view has not been wholly adopted by other surrounding areas or other judges. Given the relatively new amendments to this section, decisions regarding the interpretation of sections such as this one will eventually be promulgated.
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