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CreditCounselingIn order to file bankruptcy in Seattle, every debtor must complete a credit counseling course prior to the filing of their bankruptcy case. Additionally, there is a second credit counseling class called financial management that must be completed after your bankruptcy case is filed and before you receive a bankruptcy discharge from the court.  Failure to complete the financial management class may result in your bankruptcy case closing without receiving a discharge.  This is something that you will want to avoid as the bankruptcy court will charge a fee of $260 to reopen your case to file a credit counseling certificate and your bankruptcy attorney will likely charge you a fee for having to file a motion with the court and notifying all of your creditors that you wish to reopen your case to receive a bankruptcy discharge.  With that said, your financial hardship may have nothing to do with having to need credit counseling or financial management if your debt was medical related, but everybody does need to complete the course regardless of the circumstances.

In the Western District of Washington I tell all of my clients to take the required pre filing credit counseling class prior to me filing their case.  The bankruptcy credit counseling class must be taken within 180 days of when your case is filed.  So if you complete the bankruptcy credit counseling class more than 6 months before filing your bankruptcy case, you will need to re-take the class.  The goods news is that most credit counseling agencies will not charge you a second time for having to retake the class, but a good rule of thumb is to take the bankruptcy credit counseling class around the same time as when you provide your bankruptcy documents to your bankruptcy attorney so that you can avoid having to retake the bankruptcy credit counseling class.  In some circumstances a debtor may need to file an emergency chapter 13 bankruptcy to stop a foreclosure or a chapter 7 bankruptcy case to stop a garnishment of wages and your bankruptcy case may need to be filed immediately and you may think you do not have time to complete you pre bankruptcy credit counseling class prior to filing.  This is an understandable concern, however the credit counseling is required and is a non negotiable class that must be taken prior to the filing of a bankruptcy case, even if it is an emergency bankruptcy filing.  Most approved pre filing bankruptcy credit counseling classes only take 30 minutes to an hour to complete and the cost ranges between $5 to $35 on average so there is really no excuse for not completing the course prior to filing.  You should not let having to take the required bankruptcy credit counseling class stop you from getting financial relief, and who knows, maybe you will even learn something.

In the Western District of Washington bankruptcy court, if you do not file your pre bankruptcy filing credit counseling certificate at the time of your bankruptcy filing, the clerks office will immediately issue a warning letter that this class needs to be completed or else your case will be dismissed.  This can be alarming if you don’t want your case to be dismissed, not to mention the time and money you have spent on getting your case filed will be lost.  The bankruptcy court will typically give you a day or two to comply with this order of deficiency and most people are able to oblige the clerks office within that reasonable time frame to get their missing credit counseling certificate filed in a timely manner.  Once the first credit counseling class is complete, debtors have to take a second “financial management course” prior to receiving a discharge of debts.  In chapter 7 bankruptcy cases, a discharge is usually given after 90 days of when your bankruptcy case is filed, although it will be held back if you haven’t paid your bankruptcy filing fees or if you have not taken your second credit counseling class on financial management.  I always remind people to take this class after we complete your initial court appearance with the bankruptcy trustee which is in about 30-45 days after your bankruptcy case is filed. This initial court meeting is called the 341 meeting of creditors, and is where a bankruptcy trustee will ask you about your financial affairs and any assets you may have to make sure you don’t own assets above the allowed exemptions that protect your assets.  In order ensure that a bankruptcy discharge order will be entered by the court at the earliest possible time which is about 90 days from when a chapter 7 bankruptcy case was filed and 3-5 years in a chapter 13 bankruptcy case, debtors should be sure to complete their credit counseling requirement on time.  If the class is not taken in a timely manner, a warning letter will be issued by the court stating that you need to complete the class and failure to do so will result in your case closing without a bankruptcy discharge being issued by the bankruptcy court.

If you have additional questions about the bankruptcy credit counseling requirement, please complete the contact form or give Symmes Law Group a call at 206-682-7975 to schedule your free initial bankruptcy consultation to discuss your debt relief options.

  • Richard Symmes

    Hi, Richard here

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