Hi there. This is Jonathan Ginsberg. I’d like
to talk to you about the Credit Counseling and Financial Management
courses that you’re going to have to take as part of your Chapter 7 or
Chapter 13 bankruptcy. In 2005, when the Bankruptcy Law was changed,
Congress added two education requirements to the bankruptcy, the consumer
bankruptcy filing process. One of these is the Credit Counseling requirement.
Basically what this says is that before you can file Chapter 7 or Chapter
13, you need to undergo a credit counseling with an approved vendor.
And the credit counseling is typically going to be something that may take
45 minutes to a couple hours. And the goal of it is to help you understand
any alternatives to bankruptcy and understand what you’re really doing with
regard to the bankruptcy and to fully understand your financial situation. As a practical matter, it’s just, I hate to
call it a waste of time but it’s almost really a cost of entry. Typically
the cost is going to be 25 or 30 bucks and you go through it and you
learn about the different alternatives to bankruptcy. But usually, if
you’re talking to a bankruptcy lawyer, getting ready to file, the attorney
has probably told you about most of the stuff and a very, very small percentage
of people actually end up not filing because of this course. But
you have to go through. You have to get the certificate. It’s got to be
filed along with your case. And if you should file that bankruptcy case
without the credit counseling certificate, the case will be dismissed. It’s
an absolute requirement so you’ve got to do it. And just as a point of reference, if you’re
thinking about filing bankruptcy and let’s say it’s before Foreclosure
Tuesday, in Georgia foreclosures are the first Tuesday of the
month, these credit counseling agencies get really, really busy so my thought
is if you think bankruptcy may be an option in the near future, go ahead
and get the credit counseling certificate. It’s good for, I think, six months
or three months, six months, something like that. So go ahead and
get it. Have it on file so that when you’re ready to file, you don’t
have to waste time dealing with that right then and there. The second financial management or credit
counseling requirement is called the Financial Management course, and this
is something you’re required to take after you’ve filed bankruptcy but before
discharge. And again, this applies to Chapter 7 or Chapter 13. And basically the financial management course
is designed to help you learn more about budgeting; learn more about managing
your finances so you don’t find yourself in bankruptcy again. And I think
it’s very useful information. It’s definitely something you
should learn from. But again, this is something you have to do. It’s not
an option. And again, it’s going to cost you 25 or 30 bucks, takes about
45 minutes to an hour and half. And I would certainly pay attention
to it. But this is something you’re going to have to do. I tell my clients as soon as you file bankruptcy
go ahead and take the course because it’s not really, there’s no
reason to wait on it, and sometimes if you wait you may forget. I’ve
had a couple of Chapter 13 clients, Chapter 13 lasting 5 years in many
cases, not take the course right after filing and then, you know, we’re
in month 48 or 58 or whatever and I realize they haven’t taken the course.
And if the case is discharged or dismissed or completed rather without the
course taken, you will not get your discharge. So if the case closes, is the best way to
put this, and there’s no course taken, you will not get a discharge. So it’s
really vital that you take this course. And I say take it as soon as
you file your case, get it out of the way. Pay attention to the information
but get it out of the way. So there are two courses you’re required to
take. The Credit Counseling Course, which is before you file, and the
Financial Management Course, which is after you file. Most vendors offer
both them. But don’t get confused thinking there’s only one course
involved. There are actually two, and they are mandatory. So I hope that’s been helpful to learn about
these courses and the requirements for getting into and getting
out of bankruptcy. Any questions about this or anything else regarding consumer
bankruptcy please let me know. Thanks a lot. And again, Jonathan Ginsberg
here and keep those questions coming. Thanks a lot.