I write this to clarify misconceptions regarding the required credit counseling prerequisite to filing a bankruptcy case.

Credit Counseling Within 6 Months Prior to Filing

One of the requirements of the new bankruptcy law that went into effect in October 2005 is that all individual debtors filing a bankruptcy case must complete a credit counseling course by a certified company within six months prior to filing their bankruptcy case.

Recently I have received a number of comments from potential clients telling me that they were informed that they had to complete the credit counseling course, then wait six months before they can file their bankruptcy case.

This is completely untrue.

The certificate for a completed credit counseling course is valid for 6 months. If for some reason you obtain a certificate and do not file your bankruptcy case (Chapter 7, Chapter 13 or Chapter 11) within 6 months, then you need to take the course again and obtain another certificate.

The course itself probably takes about an hour or so to complete. Many credit counseling agencies allow this to be done online.

Post Filing Debt Management Course

There is another financial management course which Congress requires debtors to take AFTER the bankruptcy case is filed. This is a prerequisite to obtaining a discharge of debts. This financial management course (also called a debt management course) takes a similar amount of time as the credit counseling course to complete and can also be done online in many instances.

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