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Who can file

Credit counseling requirement

The credit counseling requirement is the rule that an individual must attend a briefing from an approved nonprofit budget and credit counseling agency before filing bankruptcy under any chapter. 1

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How it works

Nearly everyone who files as an individual must get the counseling within the 180 days before filing. It can be an individual or a group briefing, and it is separate from the debtor education course taken after filing. 2 1 3

Only approved agencies count. The U.S. Trustee Program publishes the approved list by state and judicial district, and in Alabama and North Carolina Bankruptcy Administrators approve the providers. In some areas the counseling is offered only by internet and telephone. 4 3

The agency issues a certificate. Individual debtors with mainly consumer debts file it with the court, together with any debt repayment plan worked out in the session. If counseling was not completed before filing, the case could be dismissed. 2 5

The exceptions are narrow. The court can excuse a person who cannot complete counseling because of incapacity, disability or active military duty in a combat zone. A temporary waiver is possible in exigent circumstances when an approved agency could not provide counseling within 7 days of a request; it ends no later than 30 days after filing, and the court may add 15 days for cause. 6

Questions about credit counseling

How long does the credit counseling session take?

A typical session should last approximately 60 minutes, and there is no required minimum length. It can be individual or group, by telephone or online. 7 6

What if my case is dismissed for skipping counseling?

You can generally file again after completing it, but if an individual had one case dismissed in the past year, the automatic stay in the new case generally ends after 30 days unless the court extends it. 5 6 8

What if I cannot afford the session?

People whose household income is below 150 percent of the poverty level are presumed to qualify for a free or reduced-fee session. 9

Related reading

Credit counseling before bankruptcyThe counseling certificate and the debtor education courseAll bankruptcy terms

Sources

  1. Glossary of Legal Terms (uscourts.gov)
  2. Chapter 7 - Bankruptcy Basics
  3. Credit Counseling and Debtor Education Courses (uscourts.gov)
  4. U.S. Trustee Program: List of Credit Counseling Agencies Approved Pursuant to 11 U.S.C. 111
  5. U.S. Trustee Program: Credit Counseling & Debtor Education Information
  6. 11 U.S. Code § 109(h)(3), (h)(4) (Cornell LII)
  7. U.S. Trustee Program: FAQs: Debtor Education
  8. 11 U.S. Code § 362(c)(3)(A), (c)(4)(A)(i) (Cornell LII)
  9. U.S. Trustee Program: FAQs: Credit Counseling

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