Pre-filing Counseling Requirement

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Pre-filing Counseling Requirement

Pre-filing counseling is a mandatory provision of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.

Consumers are required to have a “briefing” regarding other courses of action to bankruptcy and how matters are done pertaining to it in order to continue the process of filing bankruptcy.

Always remember, before filing a bankruptcy, one must complete a pre-filing counseling first before proceeding to the filing. Consumers must be well informed and fully understand the couseling. The court will dimiss the petition if you do not file the certification showing that you completed the class at the same time.

We should take into account that bankruptcy is not just a one-day filing, but a long process. A debtor will need a pre-filing counseling for him/her to move the process along.

The usual bankruptcy counseling sessions contain, but are not limited to, the following:

-An overview of bankruptcy;

-Ramifications of bankruptcy;

-A review of your current financial situation;

-An examination of alternative solutions to your financial dilemma;

-Foreclosure;

-Reaffirmation agreement;

-Means test;

-Income limits;

-Property exemptions;

-Exempt or non-exempt property;

-The role of an attorney;

-Who can file;

-Which debts can be forgiven;

-Filing a petition;

-Timeline;

-Credit after bankruptcy;

-Developing an action plan;

-The role of the United States Trustee;

-Automatic stay;

-Various types of bankruptcy;

-Voluntary vs. involuntary bankruptcy;

-Options for getting out of debt;

-Personal budget.

 

Before filing for chapter 7 or chapter 13, a pre-filing counseling must be done and realized with an approved agency for, at most, 180 days before the filing.

A pre-filing counseling class could also be a great help for you to understand everything pertaining to filing bankruptcy. Also, if you are filing with your spouse or with your partner, both of you need to participate in the counseling. Furthermore, in § 502(b) of the code, claims are determined as of the date of the filing of the petition. As a general rule, only post-petition debts of the debtor are claims against the estate. Debts incurred by the debtor after the petitions are filed is considered changes and will be charged against the debtor’s fresh start estate.

The bottom line is, pre-filing counseling is a must to complete beforehand in order to go on with the bankruptcy filing. It is not just merely a process to go through for the sake of filing a bankruptcy, but rather a training ground and an eye opener for the consumers to know what is best option for them. Contact our office if you are considering bankruptcy. We can help you explore your options.