Do Courts Require a Class Prior to Bankruptcy Filing?
In 2005, new bankruptcy reform laws were passed that affect how people file both Chapter 7 and Chapter 13 cases. A Chapter 7 proceeding is a request for legal forgiveness of most consumer debts, while Chapter 13 permits struggling debtors to restructure their obligations and pay them back under court supervision.
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Credit Counseling
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Before filing Chapter 7 or Chapter 13 bankruptcy, the debtor must complete an approved credit counseling session.
Session Formats
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The credit counseling session runs like an individual class or tutorial session. However, it can be completed online, in-person, and sometimes even over the phone.
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Certification
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Once the session is completed, the debtor will receive proof that he finished the requirement. A copy of the certificate awarded is required by the bankruptcy court to consider bankruptcy petitions.
Cost
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Most credit counseling sessions cost about twenty-five to fifty dollars, though some could run up to one-hundred-dollars.
Chapter 13 Filers
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Chapter 13 filers must also complete an additional credit counseling session before finishing their repayment plan. This aims to help debtors learn new money management skills.
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