After the bankruptcy reform of 2005, declaring personal bankruptcy became a little more difficult for the average individual. For instance, credit counseling became obligatory. If you are interested in declaring personal bankruptcy, you may want to consider the new harsh reality of credit counseling and how it can affect your bankruptcy case.
When the new laws were set into place in 2005, it became mandatory for most individuals to obtain a certificate of credit counseling from an approved credit counseling agency. This certificate must be obtained 180 days prior to declaring personal bankruptcy or within five days after the individual has filed. The certificate must then be submitted to the personal bankruptcy court.
Lists of approved credit counseling programs are provided by the government and can be found for each state at www.justice.gov. According to the Federal Trade Commission (FTC), the counseling generally costs about fifty dollars, and last for an hour to an hour and a half.
There are exceptions to this rule, of course. According to the bankruptcy code 109 (h) (4), disabled individuals may be immune from having to undertake credit counseling. However, the code states that the individual must be so mentally or physically disabled they can not, under any circumstance, attend credit counseling through an internet, telephone, or face-to-face briefing. The disabled individual must also show he or she made a reasonable effort to participate in the credit counseling, despite his or her disability. This part of the code also provides exceptions for individuals currently participating in active duty military in combat situations.
What Happens to Your Personal Bankruptcy Case If You Miss the Credit Counseling?
So what happens if you don’t submit your credit counseling certificate? In most cases, the bankruptcy court will hold a hearing to determine whether you have good cause for skipping this vital step in the bankruptcy process. You will be required to attend this hearing, either in person or over the phone, as long as you are physically capable of appearing.
The judge will look over the evidence provided and decide whether you can move forward in declaring personal bankruptcy after determining these factors:
Physically Or Mentally Disabled –
If you can show a judge you are so severely disabled you were unable to attend credit counseling, your obligation may be waived.
Reasonable Effort –
One of the best reasons to hire a personal bankruptcy lawyer instead of going pro se is how much your bankruptcy lawyer san diego can help you. If you can show you attempted to consult with your lawyer, accountant, or even tried to contact the credit counseling agents yourself, and these individuals testify that it was difficult communicating with you, you may be able to have your certificate requirements waived.
Other Impairment –
If you are in active duty military, participating in a credit counseling session through a face-to-face, telephone, or internet briefing may be impossible for you. If you are disabled and can not walk, hear well, or see well, this type of impairment may excuse you from participating in credit counseling.
While disabled and active duty military members may be able to prove their inability to provide a credit counseling certificate, others may not be. If you are in good health and are not in a combat zone, you will have no choice but to take an approved personal bankruptcy credit counseling course within the allotted time period and provide the court with your certificate of completion.
Without this certificate, you will not be able to continue with the process of declaring personal bankruptcy. Be sure you are aware of and comply with the personal bankruptcy laws to make your process smooth and stress free.