The U.S. Bankruptcy Code requires individuals to complete a “credit counseling course” before that individual can file for bankruptcy. The course must be completed within 180 days before the bankruptcy petition is filed. A debtor must also complete a debtor education course as well, after the bankruptcy petition is filed.
The courses are provided by private companies and there are numerous options available that make taking the course convenient. You can take the course online, over the telephone, or in person. The costs vary from $15 – $50, depending on which agency provides the counseling. You can find a list of approved agencies here.
Typically, you will want to wait until directed by your attorney before completing your pre-filing counseling. Sometimes, it is in your best interest to wait before filing your bankruptcy, and the waiting period might put you outside the 180-day window.
During the counseling session, the counseling agency will help you prepare a budget based on your income and expenses and then review your options for repaying the debt. In most cases, the agency verifies that you do not have any realistic options for dealing with the debt other than filing for bankruptcy. You will also receive a certificate of completion, which will need to be filed along with your other bankruptcy documents.
The time required to complete the courses can vary depending on the individual taking the course and which agency is providing the course. However, as a rough estimate, the online pre-filing counseling takes approximately one or two hours to complete, and the post-filing counseling can take approximately two hours.
At Idaho Bankruptcy Center, we would be happy to assist you in learning about bankruptcy and fulfilling the steps necessary to file. We will also help you ascertain whether bankruptcy is right for your situation. You will need the assistance of a lawyer to file a bankruptcy, and it will be easier for you to engage one early on.