In order to file a chapter 7 or chapter 13 New York bankruptcy a debtor must take what the Bankruptcy Code refers to as “an instructional course concerning personal financial management.” (11 U.S.C. § 727(a)(11)) What is this requirement?
In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), which changed a debtor’s responsibilities to include taking an “individual or group briefing … that outline[s] the opportunities available for credit counseling and assist[ing the debtor] in performing a related budget analysis.” (§ 109(h)(1)) The details are spelled out in full in § 111 of the code. Essentially, the point of the course is to discourage people from filing bankruptcy. Here’s a distillation of the important points surrounding the requirement:
- Debtors must take the course within 180 days of filing bankruptcy.
- Courses are provided by nonprofit agencies approved by the U.S. Trustee’s Program. They are multilingual.
- The course isn’t free, but it can be bought for cheap, like $20 to $75. It can be taken in person, on the Internet, or over the phone.
- Debtors must obtain a certificate indicating that they completed the course; they must file it with the bankruptcy court within 45 days after the meeting of the creditors.
- Despite the triviality of the requirement, the consequences of not taking the course or failing to file the certificate of completion are significant. Not taking the course will result in a dismissal of the debtor’s case.
- There are exceptional situations where the course isn’t required, such as when the debtor is incapable of taking it whether due to incapacity, disability, or active military duty in a military combat zone. Debtors can also attempt to waive the requirement by claiming exigent circumstances prevent them from completing the course. This doesn’t happen often.
The financial management course is one of many requirements debtors must meet to complete bankruptcy successfully. An experienced New York bankruptcy lawyer will ensure that you complete it and all the other necessary steps to obtain your fresh start.
For answers to more questions about bankruptcy requirements, the automatic stay, effective strategies for dealing with foreclosure, and protecting your assets in bankruptcy please feel free to contact experienced Brooklyn bankruptcy attorney Bruce Weiner for a free initial consultation.
