Here in Oklahoma the answer is “Yes you can.” You can file bankruptcy on the same day that you take your credit counseling class. However, if you live in another state, you may be required to wait to file bankruptcy until the day after you complete the credit counseling class.

Why the difference depending on where you live? Well, the new bankruptcy law of 2005 (BAPCPA) brought many changes to the world of consumer bankruptcy. And unfortunately, Congress did a poor job of drafting the new law which has resulted in much confusion. Much of the new bankruptcy law is unclear and subject to differing interpretations. This has resulted in bankruptcy judges having to decide exactly what the new law means. And many times we receive diametrically opposite rulings from different bankruptcy judges on the exact same issue. That is what has happened with the question of whether or not a person can file bankruptcy on the same day he or she completes the credit counseling class.

The credit counseling requirement is a result of the new bankruptcy law of 2005. Previously, a person filing bankruptcy was not required to take a credit counseling course.

11 USC 109(h)(1), which was added to the Bankruptcy Code by the BAPCPA amendments of 2005, provides as follows:

Subject to paragraphs (2) and (3), and notwithstanding any other provision of this section, an individual may not be a debtor under this title unless such individual has, during the 180-day period preceding the date of filing of the petition by such individual, received from an approved nonprofit budget and credit counseling agency described in section 111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis. (Emphasis added.)

The effort to define “during the 180-day period preceding the date of filing of the petition by such individual” has resulted in two distinct lines of case law.

The first line of cases (“Plain Language”) holds that the phrase “the 180-day period preceding the date of filing” requires that the credit counseling be obtained no later than the calendar day prior to the day on which the petition is filed.

The second line of cases (“Bright Line”) holds that § 109(h)(1) is satisfied so long as the credit counseling precedes the filing of the petition, even if both events occur on the same calendar day.

Here in Oklahoma, we follow the “Bright Line” approach due to the case of In re Francisco, BAP No. NM-08-019. (B.A.P. 10th Cir. 7/2/2008) (B.A.P. 10th Cir., 2008). In this case, the debtor completed the required credit counseling class in the morning and later that same day filed bankruptcy. Shortly thereafter, the bankruptcy judge, sua sponte, issued an Order directing the Debtor to show cause why her case should not be dismissed pursuant to § 109(h)(1). A hearing was held and the bankruptcy judge dismissed the case. The debtor appealed and the appellate court reversed the bankruptcy judge’s decision by holding that a debtor qualifies as a debtor under § 109(h) so long as he or she completes the required credit counseling at any time between 180 days before, and the moment of, filing the petition.

If you have are struggling with debt problems and have questions about how bankruptcy ma be able to help, contact Tulsa bankruptcy lawyer Dan Nunley today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

The new bankruptcy law of 2005 (BAPCPA) requires that everyone filing Chapter 7 or Chapter 13 bankruptcy must complete a Credit Counseling class AND a Personal Financial Management/Debtor Education class. Why two different classes? Well, the Credit Counseling class focuses on your existing debts whereas the Personal Financial Management class attempts to teach you how to budget and responsibly manage your finances for the future.

The Credit Counseling class must be taken before you file bankruptcy while the Personal Financial Management class is taken after you file bankruptcy. Even though taken at different times, you may take both classes from the same provider. Just make sure that the provider is a non-profit budget and credit counseling agency that has been approved by the Department of Justice’s United States Trustee Program.

Upon completion of each class, you will receive a Certificate of Completion. You must provide proof of course completion to the bankruptcy court in order to avoid dire consequences.

If you fail to provide the bankruptcy court with a copy of your Credit Counseling Certificate of Completion, your newly filed bankruptcy case will be summarily dismissed. You can always refile, but that costs more money and wastes time.

Worse yet is what happens if you fail to provide proof that you completed the Personal Financial Management class. Then your bankruptcy case being closed without a discharge order being issued to you. This would be terrible because the discharge order is why you filed bankruptcy to begin with. It’s the discharge order that releases you from personal liability for certain types of debts. In other words, obtaining a discharge means that you are no longer legally required to pay the debts that are discharged. Therefore, your creditors can no longer take any action against you to collect those debts. No letters. No phone calls. No lawsuits. No garnishments. But, if you do not receive a discharge because you failed to provide proof of having completed the Personal Financial Management class, you will still owe each and every one of your debts. And believe you me, your creditors will come back after you with a vengeance.

So in conclusion, be sure to take the two required classes at the right time and then follow up by providing proof to the court that you completed both courses. A service that I offer to my clients is assistance in both scheduling these two classes and providing the appropriate notification to the court.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Yes you do.. As I wrote recently, the new bankruptcy law passed in 2005 requires a person to take a Credit Counseling class before filing bankruptcy. In addition to this Credit Counseling class, a person filing bankruptcy also must take a second class called the Personal Financial Management class. However, this second class doesn’t need to be taken until after the bankruptcy case has been filed.

There are three main stated objectives of the Personal Financial Management class:

1. To help you understand the benefits of creating short-term and long-term financial goals,
2. To teach you how to create a budget, and
3. To teach you how to balance a checkbook and reconcile bank statements.

The stated purpose of this class is to help you become financially literate and avoid another bankruptcy.

One of the services that I provide my clients is assistance in setting up both the Credit Counseling class and the Personal Financial Management class. You can take the Personal Financial Management class in person, by telephone or on the Internet. The cost is approximately $20 per person.

Just like in the Credit Counseling class, you will receive a Certificate of Completion once you have successfully completed the Personal Financial Management class too. In a Chapter 7 case, the Certificate of Completion must be filed with the Court no later than 45 days after the date first set for the Meeting of Creditors. In a Chapter 13 case, the Certificate of Completion must be filed with the Court prior to the last payment being made to the Chapter 13 Trustee. This is important because if you do not complete this second course after filing for bankruptcy, you will not receive a bankruptcy discharge which is generally the reason a person files bankruptcy to begin with.

You may be excused from taking the personal financial management course if you meet one of the following 3 conditions:

1. incapacity where the person is so impaired by reason of mental illness or deficiency that the individual is incapable of making rational decisions,
2. disability where the person is so physically impaired that the individual is unable, after reasonable effort, to participate in an in-person, telephone, or Internet briefing session, and
3. active military duty in a military combat zone.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.

Yes. One of the requirements of the new bankruptcy law passed in 2005 is that all people who file bankruptcy must complete a credit counseling course within 180 days before their bankruptcy case is filed.

It makes no difference whether your debts are personal or business related. It makes no difference whether you are filing under Chapter 7, Chapter 11, Chapter 12 or Chapter 13. You must take the credit counseling course before you file bankruptcy. And the credit counseling course must be taken from an organization that has been approved by the Department of Justice’s U.S. Trustee Program.

One of the services that I provide my clients is assistance in setting up this required credit counseling course.

You can take the credit counseling course in person, by telephone, or on the Internet. The course will cost approximately $50 for either an individual or a married couple filing together. The credit counseling will include include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan.

Once you have completed the required counseling, a Certificate of Completion will be prepared which must be included with your bankruptcy documents when you case is filed with the court. If your bankruptcy case is filed before you have taken the credit counseling course, your case will be dismissed except for these 3 special circumstances where credit counseling is not required:

1. incapacity where the person is so impaired by reason of mental illness or deficiency that the individual is incapable of making rational decisions,
2. disability where the person is so physically impaired that the individual is unable, after reasonable effort, to participate in an in-person, telephone, or Internet briefing session, and
3. active military duty in a military combat zone.

Additionally, if you attempt to get the credit counseling before filing for bankruptcy but cannot obtain it during the 5-day period after making the request, you may ask the court to make an exception and allow you to obtain the credit counseling during the 30-day period after you file your case. You must file a separate motion with your bankruptcy petition and describe “exigent circumstances” that justify the exception, the name of the agency you contacted and the date you made your request.

If you’re struggling with debt problems and would like to know more about how bankruptcy may be able to help you, contact me today to schedule a FREE initial consultation. Just fill out the Contact Dan form on the far right side of the page and click the Submit button and I’ll get back with you as quickly as I can. I would count it a privilege to be able to visit with you in a relaxed and confidential environment where I’ll answer all of your questions in plain English and give you the straight scoop on the pros and cons of bankruptcy as related to your specific situation.