In 2005, bankruptcy rules changed to include two important things a person must do prior to filing bankruptcy. The first rule change was the means test requirement to determine if the person was eligible to file chapter 7. The second rule change was the pre-bankruptcy credit counseling requirement.
What is Pre-Bankruptcy Credit Counseling in a Georgia Chapter 7 Case?
Pre-bankruptcy credit counseling is a course required by the bankruptcy courts to determine if a person is eligible to file bankruptcy. It requires a person to contact a credit counseling agency and speak with a counselor about their debts. The credit counseling agency must be approved by Georgia bankruptcy court. This means an individual can’t pick any credit counseling agency. They must pick the agency from a list approved by the bankruptcy court.
The Pre-Bankruptcy Credit Counseling Sessions Last for about One Hour
The bankruptcy credit counseling sessions usually last for one hour. However, it could be less depending on the agency and the information discussed. The session does cost a fee and it must be paid by the person filing chapter 7. Georgia bankruptcy court does allow a person to request a fee waiver if they can’t afford to pay.
The Pre-Bankruptcy Credit Counselor Determines if Chapter 7 is Needed
Pre-bankruptcy credit counseling can be complete over the phone, online or in-person. During the credit counseling session, an individual will discuss their current financial situation such as income and expenses. The credit counselor’s job is to look for ways the person can eliminate their debts without using chapter 7. For example, they may discuss creating budget with the person to decrease their debts. The credit counselor will also ask about ways the individual tried to pay off their debts in the past such as negotiating payments with creditors.
The Person is Giving a Pre-Bankruptcy Credit Counseling Certificate
After the pre-bankruptcy credit counseling ends, the counselor will determine if the person meets the criteria for filing bankruptcy. For example, one criterion is usually the fact that chapter 7 is the only option for the person to eliminate their debts. Also, after the session, the person will receive a pre-bankruptcy credit counseling certificate. The certificate can be emailed to the person.
To file chapter 7 bankruptcy Effingham County, GA, the certificate must be submitted along with the petition. The certificate is proof pre-bankruptcy credit counseling was completed. That petition may be dismissed without the certificate.
Exceptions to the Pre-bankruptcy Credit Counseling Rule
A person on active military duty located in a combat zone is not required to complete pre-bankruptcy counseling. If the individual is mentally or physically impaired to the extent they can’t complete credit counseling, they are exempt too. It’s important to ask an Effingham bankruptcy lawyer for assistance filing for chapter 7 bankruptcy. Georgia bankruptcy court may make an exception if the person can’t complete counseling prior to filing bankruptcy. It may allow the individual to take the credit counseling after the petition is filed. However, it is important to hire a bankruptcy lawyer for assistance.