Utah Debtor's Legal Relief47 North Main Street, Ste. 2
Kaysville, Utah 84037
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HoursMonday - Friday: 9am to 5pm
* After hours appointments are available
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Utah Bankruptcy Credit Counseling & Bankruptcy Debtor Eduction
For most individuals filing for bankruptcy protection, the Bankruptcy Code requires:
- Credit Counseling BEFORE the bankruptcy petition is filed; and
- Debtor Education AFTER the petition is filed and before a discharge may be issued.
BANKRUPTCY CREDIT COUNSELING
Q: Who must obtain credit counseling?
A: All individual debtors. In a joint case, each spouse must obtain credit counseling.
Q: Does it matter whether my debts are consumer or business?
A: No. Do not confuse credit counseling with the means test in Chapter 7 (required only by individuals with primarily consumer debt). All individuals need to obtain credit counseling.
Q: Does it matter under which chapter I’m filing?
A: Credit counseling is required for all individuals filing petitions under chapters 7, 11, 12, and 13.
Q: When must I get the counseling?
A: BEFORE filing the petition. Specifically, you must do the credit counseling during the 180-day period before filing for bankruptcy.
Q: May I get the counseling from any agency that offers help with debt counseling?
A: No. The agency must be a nonprofit budget and credit counseling agency that has been approved by the United States Trustee Program.
Q: Must the counseling be done in-person?
A: The counseling may take place in-person, over the phone, or via the Internet.
Q: Is anyone excused from the credit counseling requirement?
A: There are only 3 situations where credit counseling is not required:
(1) incapacity where the person is so impaired by reason of mental illness or deficiency that the individual is incapable of making rational decisions;
(2) disability where the person is so physically impaired that the individual is unable, after reasonable effort, to participate in an in‐person, telephone, or Internet briefing session; and
(3) active military duty in a military combat zone.
BANKRUPTCY DEBTOR EDUCATION
Q: Who must take a “debtor education” course?
A: Instruction in personal financial management, more commonly referred to as debtor education, is required for all individual debtors under chapters 7 and 13.
Q: I obtained the credit counseling before filing. Why do I need more instruction?
A: The law sets forth two separate requirements ‐ credit counseling before bankruptcy and a personal financial management course taken after you have filed your petition. The personal financial management course is more commonly referred to as “Debtor Education.” When you complete the instruction, you will receive a Certificate of Debtor Education.
Q: I still don’t understand the difference. Why 2 courses?
A: Credit counseling focuses on your existing debts. In some cases, the agency will prepare a debt repayment plan which may allow you to work out payments with your creditors without actually filing for bankruptcy. In contrast, the debtor education course attempts to teach you how to budget and responsibly manage your finances for the future.
Q: May I combine the credit counseling with the debtor education?
A: No, although you may choose to use the same agency if it is approved for both credit counseling and debtor education services by the United States Trustee Program. Using the same agency may be less expensive if a “package” price is offered. However, remember that they must be done at separate times ‐ credit counseling before bankruptcy and debtor education during bankruptcy.
Q: Is there a separate list of agencies approved for debtor education programs?
Q: Is there a deadline for taking the debtor education course?
A: Yes. In chapter 7, you must complete the course within 60 days after the first date set for your meeting of creditors. In chapter 13, you must complete it before making your last plan payment or before filing a motion requesting a discharge based on hardship.
Q: What happens if I don’t meet the deadline?
A: The court will send you a notice that you must complete the debtor education in order to obtain a discharge. The discharge is why you filed for bankruptcy. The discharge releases a debtor from personal liability for certain types of debts. In other words, obtaining a discharge means that you are no longer legally required to pay the debts that are discharged. If you go through bankruptcy but do not receive a discharge, you remain responsible for paying all your debts. If you wait too long to complete the debtor education course, the court will close your case without a discharge.
Q: If closed without a discharge, can’t I reopen my case after getting the debtor education?
A: Yes. But you will be required to pay a reopening fee.
Q: Is there any exemption available?
A: The same as for the credit counseling ‐ incapacity, disability, or active military duty in a military combat zone.
Q: May I fax or email my certification to the court?
A: No. Documents that are faxed or emailed to the court by attorneys or debtors will not be filed.
Q: May I send Form 23 or my certificate to the Trustee in my case?
A: No. These documents must be filed with the court in order for you to be issued a discharge. The Trustee may think you are sending a “courtesy copy” and may not forward it to the court for filing.