There are two courses that every bankruptcy debtor must take during the pendency of their bankruptcy case. First, a credit counseling course must be taken before the debtor files bankruptcy. Second, the debtor must complete a financial management course after filing bankruptcy but before he receives a discharge.
The credit counseling course is designed to allow the debtor to review his financial situation and determine if bankruptcy is the best option or if he can pay off his debt with a little creative budgeting. The financial management course is taken after the bankruptcy case is filed and is designed to teach the debtor how to manage his money so he doesn’t have to file bankruptcy again in the future.
The deadline for filing the financial management course certificate is forty-five days after the 341 meeting of creditors. In practice, the certificate must be filed any time before discharge. In Chapter 7 cases that means that the certificate must be filed within 60 to 75 days after the 341 meeting. In Chapter 13 cases the debtor has three to five years to complete the course and file the certificate because that is the typical duration of a Chapter 13 plan.
It is best to complete the course and file the certificate as soon as possible. If a certificate is not filed the case will eventually be closed without the debtor receiving a discharge. That means that even though the debtor completed a bankruptcy course he did not receive a discharge from his debts. If this happens the debtor must file a motion to reopen the case in order to file the certificate. This can be costly. The court will charge $150 filing fee for the motion to reopen. Debtor’s attorneys usually charge for preparing the motion and attending the hearing, if one is necessary. The cost of reopening a case to file the financial management certificate can exceed $650.