If you plan to file for a Chapter 7 bankruptcy in Minnesota, you will need to get credit counseling from a government-approved organization in Minnesota within 180 days before you file for bankruptcy. You also must complete a debtor education course to have your debts discharged. A bankruptcy attorney can help explain this process.
The following information is provided for those who are interested in learning the process before meeting with a bankruptcy attorney. Please note that this information on bankruptcy credit counseling is provided as general education. Before relying on this information, you should consult with a bankruptcy attorney regarding your particular circumstances.
Bankruptcy Credit Counseling
The Department of Justice’s U.S. Trustee Program approves organizations to provide mandatory credit counseling and debtor education. Only the counselors and educators that appear on the U.S. Trustee Program’s lists can advertise that they are, indeed, approved to provide the required counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers.
Counseling and Education Requirements
As a rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtor education must take place after you file.
In general, you must file a certificate of credit counseling completion when you file for bankruptcy, and evidence of completion of debtor education after you file for bankruptcy – but before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.
A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes and can take place in person, on the phone, or online. The counseling organization is required to provide counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the counseling organization before the session begins. Otherwise, you may be charged a fee for the counseling, which will generally be no more than $50, depending on where you live, the types of services you receive, and other factors. The counseling organization is required to discuss any fees with you before starting the counseling session.
Once you have completed the required counseling, you must get a certificate as proof. You can check the U.S. Trustee’s website to be sure that you receive the certificate from a counseling organization that is approved in Minnesota. Credit counseling organizations may not charge an extra fee for the certificate.
Post-Filing Debtor Education
A debtor education course by an approved Minnesota provider should include information on the following:
- developing a budget,
- managing money,
- using credit wisely, and
- other resources.
Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling – about two hours – and the typical fee is between $50 and $100. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider.
Once you have completed the required debtor education course, you should receive a certificate as proof. This certificate is separate from the certificate you received after completing your pre-filing credit counseling. Check the U.S. Trustee’s website to be sure that you receive the certificate from a debtor education provider that is approved in the judicial district where you filed bankruptcy. Unless they have disclosed a charge to you before the counseling session begins, debtor education providers may not charge an extra fee for the certificate.
Important Questions to Ask When Choosing a Credit Counselor
A bankruptcy attorney can help you identify a reputable credit counselor. In preparing a list of credit counselors, a number of questions were considered:
- What are your fees?
- Do you offer online videos/services?
- What services do you offer?
- Will you help me develop a plan for avoiding problems in the future?
- What if I can’t afford to pay your fees?
- What qualifications do your counselors have? Are they accredited or certified by an outside organization? What training do they receive?
- What do you do to keep information about me (including my address, phone number, and financial information) confidential and secure?
- How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
To learn more, meet with a bankruptcy lawyer to discuss your particular circumstances. Attorney Aaron Hall can recommend excellent credit counseling services including those that can be completed by watching an online video.