I Am Considering Filing Bankruptcy, When Should I Take The Pre-Filing Credit Counseling?

A credit counseling session must be taken prior to a bankruptcy case being filed. You want to make sure that you do not take the credit counseling too far in advance of your bankruptcy filing. The bankruptcy code mandates that the credit counseling session must be completed within 180 days prior to your actual filing. I have come across clients who jump on the credit counseling early only to find out that they have to take it a second time.

The typical scenario is that someone will come to me for chapter 7 or chapter 13 bankruptcy relief.  I will inform them and advise them about the pre-filing credit counseling requirement. I will also advise them to not take the pre-filing credit counseling session until they are closer to being paid in full and closer to being actually file. There is nothing worse than having to take the credit counseling session twice.

You do not need to be concerned about the pre-filing credit counseling class until you really have all of your attorney’s fees paid and your other pre-filing requirements satisfied. For example, if you know you are going to be on a payment plan that is going to last 4 to 6 months, then you simply should wait to take the credit counseling session. I have had numerous clients that went ahead and took the credit counseling even though I advised them not to do so. Oftentimes, they will search for credit counseling companies on the internet. I recommend a particular credit counseling agency that currently charges $15 for either individual or joint sessions. Many potential clients come to me with the pre-filing credit counseling already satisfied. People sometimes go to another attorney before me and receive advice that they need to take the credit counseling. Many of those cases require the credit counseling to be taken again because it has expired.

I believe the requirement that you must take the credit counseling within 180 days of filing is a little bit stringent. I would like to see the legislature amend the clause to a one-year prior to filing requirement for the credit counseling. After all, if someone has taken the credit counseling and 190 or 210 days have passed prior to filing, is there really a point in mandating that they take the credit counseling session again. Are they really going to pick up any additional information or be convinced not to file when really all they want is to either get out of debt or reorganize their debt? Thus, clients beware. Do not take the credit counseling session until you are ready to have your case filed. If you take the class too soon, there is a chance that you may be taking it a second time.