Credit Counseling FAQs

Credit Counseling FAQs

All individuals who wish to file bankruptcy are required to complete pre-bankruptcy credit counseling and pre-discharge debtor education. Credit counseling must take place before the bankruptcy case is filed; debtor education must take place after the case is filed.

Here are some answers to frequently asked questions about credit counseling.

Q: Must all individuals obtain credit counseling before filing a chapter 7, chapter 11, chapter 12, or chapter 13 bankruptcy case?

A: Yes. All individuals who file for bankruptcy must obtain credit counseling, including those with primarily business debts. (11 U.S.C. § 109(h)).

Q: May an individual other than the client, such as the client’s attorney, pay for credit counseling?

A: Yes. Individuals other than the filer may pay for credit counseling if payments are reasonable and comply with applicable laws, regulations, and the ethical requirements of attorneys. The fee charged and paid for the counseling session must be disclosed by the credit counseling agency to the client. The payments may not adversely affect the quality of any services rendered by the agency.

Q: What if a debtor cannot afford to pay for credit counseling?

A: An agency must inform clients that services are available for free or at a reduced rate, based on a client’s ability to pay, before providing any information to or obtaining any information from a client, and before beginning a counseling session.

While fee waiver policies may vary by agency, a filer whose household income is less than 150 percent of the poverty level is presumptively entitled to a fee waiver or fee reduction. The poverty level is defined by the poverty guidelines updated periodically in the Federal Register by the U.S. Department of Health and Human Services.

Q: Do married couples need separate financial counseling sessions if they intend to file a joint bankruptcy petition?

A: No. Joint filers such as married couples may both attend the same counseling session. The agency must provide personalized counseling and issue a separate certificate to each individual.

Q: Can I complete my debtor education and credit counseling requirements in the same session?

A: No. The Bankruptcy Code requires individuals to complete credit counseling before filing for bankruptcy and requires debtor education to be completed after the bankruptcy case is filed. Therefore, an approved agency may not offer both services to clients in the same session.

Q: What if I have lost my certificate or it contains an error?

A: Anyone who has an error on their certificate or has simply lost it, should contact the credit counseling agency that issued the certificate to obtain a replacement or corrected certificate.

One of the Morrison Law Group’s qualified and knowledgeable bankruptcy attorneys may answer any bankruptcy debtor’s questions about any relevant bankruptcy law. The Morrison Law Group can also help if you just want to talk about Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 today to schedule a FREE consultation. We have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.