Every person who files bankruptcy must take a financial management course before he will receive a discharge. This course must be taken in order to receive a discharge in both a Chapter 7 and a Chapter 13 bankruptcy. The financial management course is different from the credit counseling that a person takes before he files for bankruptcy. The financial management course is taken after the bankruptcy petition has been filed.
The financial management course must be approved by the Court. You can obtain a complete list of court approved agencies at this web address. These agencies have been approved by the Bankruptcy Administrator for the Northern District of Alabama.
After the financial management course is completed, a certificate of completion must be filed with the court along with Official Form 23. In a Chapter 7 bankruptcy, Form 23 and the financial management certificate must be filed within 45 days after the meeting of creditors. In a Chapter 13 bankruptcy, Form 23 and the financial management certificate must be filed before the last plan payment is made to the Trustee. Failure to take the course and submit the required form and certificate can result in the entire bankruptcy case being closed without a discharge. To prevent that we recommend that all debtors, whether in a Chapter 7 or a Chapter 13, go ahead and complete the course within 45 days of filing the bankruptcy petition. That way there is no pressure years later to remember to complete this requirement. Additionally, the financial management course may provide debtors with information that will help with budgeting and managing finances during the life of their bankruptcy plan.
If you are thinking about filing bankruptcy, an experienced attorney can be invaluable when deciding between different options and navigating the various requirements of the bankruptcy court. Please contact one of our offices to set up a free consultation with one of our attorneys.