What Happens If You Fail To Take Your Financial Management Course In Bankruptcy?

You went through your entire bankruptcy process.  

Filled out all the paperwork.

Checked it twice.

Filed your case.

You attended the required Meeting with the Trustee.

Nobody filed any objections.

You expect and think you deserve your discharge of debts any day now.

Instead, you get a notice that your case was dismissed without the discharge being granted.

Why?  How could this happen?

Answer: You forgot to take and/or timely file with the court the required proof of taking your post-bankruptcy financial debt management course.


Filing Form 423-Debt Financial Management Course

For bankruptcy cases filed after October 2005  individuals must,  after filing their case,  take a  Financial Management Course and file Official Form 23 along with the certificate of completion to receive a discharge in any bankruptcy case.

The financial management (sometimes also referred to as the debt management) course is different from the pre-filing credit counseling course which must be filed along with the initial bankruptcy petition.  These courses must be taken from an institution approved by the Office of the United States Trustee.  See list of approved credit counseling companies.

Many debtors who file bankruptcy cases without the assistance of a qualified bankruptcy attorney eventually receive a shocking notice in the mail which states:  “Case closed without discharge.  Debtor has not filed a Financial Management Course Certificate proving compliance with the required instructional course requirement for discharge.”

However, they’ve done everything else required of them except for taking the required financial management course and filing the required Form 23.   All that time and work, and no discharge?

File Your Form 423 By Reopening Your Case 

Fortunately, there is usually a solution if this happens in your case.  Pursuant to 11 U.S.C. 350,  and Federal Rule of Bankruptcy Procedure  5010 you can file a motion to reopen your case and, if granted, take and file the required financial management course certificate.

The best way to accomplish this is to hire a bankruptcy attorney for this purpose to make sure the facts of your case are presented properly and maximize your chances to have the Motion granted and to get your discharge entered.

There is a court mandated filing fee for the Motion to Reopen for the purpose of filing official form 23 (presently $260) and attorney’s fees vary, but this is not the time to skimp and save.  You have now discovered one of the reasons why you should have hired a bankruptcy attorney in the first place; now is the time to do so and obtain your discharge.

**If your case was filed in the Southern California Area and you need assistance, please contact us and explain your situation.


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