Credit Counseling Classes in a Chapter 7 Case
Joliet Illinois Bankruptcy Lawyers & Attorneys
Jesse Barrientes: Well, tell me a little bit about the process here. Or tell our folks at home about the process. You know, so you come in to Joliet. You bring your stuff together. You qualify. You pass the means test, even if goes that way or maybe you don’t need to pass the means test because you’re in that income level where it’s okay to file a Chapter 7. You’ve got just the right amount of equity in your house. You’re paid up to date on that but you want to keep your house. You need shelter for your family. You’ve got your car. You’re ready to ____ reaffirm and everything else. And –
Dave Siegel: Well your Chapter 7 bankruptcy attorney is going to advice you of the certain pre-filing requirements you need to complete. You must take a credit counseling session.
Jesse Barrientes: Oh wait a minute. In a couple of years you didn’t have to do that?
Dave Siegel: That’s right.
Jesse Barrientes: What changed?
Dave Siegel: Well the law changed in 2005. And the law made it a little more difficulty for folks to file.
Jesse Barrientes: And who is behind that impetus. Who is behind that push do you think?
Dave Siegel: Well typically the credit card industry. They pushed for this for about eight years. It was vetoed under President Clinton. Do you remember him? He was two presidents ago.
Jesse Barrientes: Oh yeah.
Dave Siegel: But they finally got it pushed through during the second term of George Bush and under Obama we might see some changes as well that will benefit – that will benefit home owners. They may be able to reduce their outstanding mortgage balance down to the secured portion, to the market value. But that’s getting ahead of ourselves. But basically you need to take credit counseling. It’s a one hour session typically.
Jesse Barrientes: Is that on the – can I do that on the computer? Because I don’t really have a lot of time to do anything else.
Dave Siegel: You can do it on the computer. You can do it in person. You can even do it over the telephone.
Jesse Barrientes: What is it for an hour? What is that going to cost me?
Dave Siegel: Typically $50. And it’s a data entry session where you have to explain your income, your expenses, your assets, your liabilities.
Jesse Barrientes: So I need my information in front of me.
Dave Siegel: You need your general information in front of you. And you will get a certificate once you complete that program. That’s required before you can file a bankruptcy. And the certificate only lasts for six months.
Jesse Barrientes: So what if you file it today and I got my certificate tomorrow?
Dave Siegel: Your case would be dismissed. In fact some judges would consider that you didn’t ever even file. That it was void right from the beginning.
Jesse Barrientes: So then I’d have to pay the fee again to file it again.
Dave Siegel: You would have to pay the fee again. You’d have to file a brand new petition. You’d have to pay court costs again. You definitely don’t want to do too much on your own without the advice of an experienced bankruptcy attorney because there are so many holes that you can fall into now under the new law, that you want to be very careful and follow the advice of counsel.
Jesse Barrientes: There is also – so this is a pre-requisition, this management class. There’s also another debt management class that you have to take which is after you filed your case but before you get a discharge. Is that correct?
Dave Siegel: Yes. After the case is filed you need to submit to a two hour financial management class.
Jesse Barrientes: Two hours?
Dave Siegel: Two hours.
Jesse Barrientes: Can I do that on the internet?
Dave Siegel: You can. You can also do that on the telephone. You can do that in person. And it’s like Rodney Dangerfield. You’re going back to school for a two hour class, Jesse.
Jesse Barrientes: And what are they going to teach me? Because, Dave, I don’t think I’m you know in this shape because I didn’t take a debt management class.
Dave Siegel: Well, hold on. You just filed bankruptcy in Joliet. So the government feels you don’t know too much about finance. You don’t know the difference between zero percent and 29 percent. And you need to be taught that.
Jesse Barrientes: So I’m going to have to jump through this hoop anyway.
Dave Siegel: It’s another hoop basically. It’s another $25 or $50 fee. You’ll get another certificate that you can hang on the wall. But most importantly, you will now be eligible for a discharge. Because if you don’t take that class your case dismisses without a discharge and you just wasted all your time and money and got no results.
Jesse Barrientes: So if I was smart I’d be teaching debt management classes, right?
Dave Siegel: That’s right. But the government is smarter than that. They’re not going to let someone who hasn’t done it for several years all of a sudden open up a business. You had to prove you were in that business and helping people for a number of years before you get qualified.
Back to Joliet Illinois Bankruptcy Lawyers & Attorneys
Chapter 7
What’s needed to file a Chapter 7 case?
Stay on creditors during a Chapter 7 case
Mistakes made in a Chapter 7 case
Listing creditors in a Chapter 7 case
Credit counseling classes in a Chapter 7 case
Notice to creditors in a Chapter 7 case
There is life after bankruptcy
Chapter 13
Saving your home with a Chapter 13
Stopping a sheriff sale using Chapter 13
Converting to a different chapter from Chapter 13
