Credit Counseling Required Before Filing Bankruptcy

How does the credit counseling requirement actually work?

The requirement lives in 11 U.S.C. § 109(h), the section of the Bankruptcy Code that defines who may be a debtor. An individual must receive a briefing from an approved nonprofit budget and credit counseling agency during the 180 days before the bankruptcy petition is filed. The briefing may be an individual session or a group session.

The agency then issues a certificate of credit counseling. Courts describe that certificate as a required filing: the Northern District of Alabama, for example, states that no individual may be a debtor under any chapter unless he or she has received counseling within 180 days before filing, citing 11 U.S.C. §§ 109 and 111.

Because the deadline runs backward from your filing date, the order matters. Counseling comes first, the petition comes second. Several courts publish blunt warnings on this point: the District of Colorado tells debtors that if the course was not completed and no exception applies, the case will be dismissed and no discharge will be entered.

What changes the answer for a particular person?

A handful of facts move this from routine to complicated.

The first is timing. A briefing completed more than 180 days before you file does not count, and one completed after you file does not count either, absent an exception. The District of Colorado describes the required course as counseling ending on or before the date the petition is filed.

The second is emergency. If a foreclosure sale or a garnishment forces an immediate filing, § 109(h)(3) allows a certification instead. The District of Maryland lists all three conditions together: you requested counseling from an approved agency but could not get it during the five-day period beginning on the date of the request, exigent circumstances merit a waiver, and you file a certification of those facts with the petition that the court finds satisfactory.

The third is capacity. Section 109(h)(4) covers incapacity, disability, and active military duty in a combat zone, requested by motion.

The fourth is joint filing. Courts filing checklists treat each spouse as needing the information separately in a joint case.

What does federal law say about approved agencies?

Two sections do the work. 11 U.S.C. § 109(h) creates the requirement. 11 U.S.C. § 111 governs who is allowed to provide it.

Under § 111(a), the clerk maintains a publicly available list of nonprofit budget and credit counseling agencies that provide services described in section 109(h) and are currently approved by the United States trustee, or the bankruptcy administrator if there is one. The same subsection covers the separate list of approved personal financial management instructional courses.

Approval is not automatic or permanent. Section 111(b) requires the United States trustee to thoroughly review an agency's qualifications against the standards in the section, and a newly listed agency gets a probationary approval not to exceed six months. After probation, approval runs for an additional one-year period and successive one-year periods, and only for an agency that has met the standards and can satisfy them going forward.

That is why courts consistently say approved agency rather than credit counselor.

Where do state or local court rules differ?

The 180-day rule itself is federal and does not change from state to state. What changes is local mechanics, and those differences are real enough to cost you a deficiency notice.

Districts differ on how the certificate is docketed. The Northern District of Alabama requires the Certificate of Credit Counseling to be filed as a separate docket event with its own PDF, and issues a Notice of Incorrect Filing Event, with two days to correct, when it is bundled into the petition package. The District of Massachusetts, by contrast, states the certificate can be filed as part of the petition, as an attachment, or separately.

Districts also differ on motion practice. The Southern District of Indiana distinguishes a Motion to Extend Time for Credit Counseling from a Motion Requesting Temporary or Permanent Waiver, and the Eastern District of New York's LBR 1007-2 sets out how § 109(h)(3)(B) and § 109(h)(4) motions must be noticed and supported.

Your state hub and court page carry the local specifics.

• Docketing format: separate PDF event versus attached to the petition, depending on the district
• Which motion applies: extension of time versus temporary or permanent waiver
• Local rules on notice and supporting evidence for § 109(h)(3)(B) and § 109(h)(4) motions
• Whether the district's United States trustee has determined the requirement does not apply there

What does this look like in practice, step by step?

The sequence is short, and courts publish it in checklist form. The District of Minnesota's Chapter 13 flowchart puts it first: complete the credit counseling course and obtain a certificate before filing, within 180 days prior to filing.

The practical path most people follow is below. Note that the timing of when the certificate itself reaches the court is a separate question from when you take the course, and it varies by district.

• Find an agency on the United States Trustee list of approved agencies for your district.
• Complete the briefing. The District of Maryland notes it may be conducted online, over the phone, or in person.
• Ask the agency for the certificate and a copy of any debt repayment plan developed during the session.
• Confirm the certificate reflects counseling received within the 180 days preceding your filing date.
• File the certificate with the court. Districts vary: the Northern District of Alabama says the certificate must be filed with the petition or within 14 days, while § 109(h)(3) certifications and § 109(h)(4) requests must be filed WITH the petition.
• After filing, complete the separate personal financial management course before discharge.

What documents and information are involved?

The core document is the certificate of credit counseling issued by the approved agency. If the session produced a debt repayment plan, the District of Maryland advises asking for a copy of that too, and N.D. Fla. LBR 1007-1 refers to filing a credit counseling certificate and a debt repayment plan developed under § 109(h).

The petition itself asks about it. The Southern District of Indiana explains that question 15 of the voluntary petition has boxes covering the different situations, including one for counseling obtained but no certificate yet in hand, and different boxes when counseling was not obtained at all.

One cost note, because people ask: the counseling fee is charged by the agency and is separate from what the court charges. The Chapter 7 filing fee is $245 (28 U.S.C. § 1930(a)(1)(A), (f)(1)), plus a $78 administrative fee and a $15 trustee surcharge. Chapter 13 is $235 plus a $78 administrative fee.

How is this different from the course you take after filing?

These are two different courses with two different names, two different providers lists, and two different deadlines. Confusing them is common and consequential.

The Western District of Louisiana states the distinction plainly: credit counseling must take place before you file for bankruptcy, and debtor education must take place after you file, and the two may not be provided at the same time. Certificates for both are required before debts can be discharged, and only providers approved by the United States Trustee Program may issue them.

The District of Maryland puts the same warning in one line: debtor education is not the same as pre-petition counseling.

Deadlines for the post-filing course differ by chapter. The Western District of Louisiana describes Chapter 7 filers filing Official Form 423 within 60 days after the first date set for the meeting of creditors, and Chapter 13 filers filing it before the last plan payment or before a motion for entry of discharge.

What should you ask a lawyer about this?

Most people complete this step without difficulty. The questions worth asking are about the edges, and about whether filing right now is the right move at all.

A local bankruptcy attorney can also tell you how your specific district handles the mechanics, which is where the variation lives. Court clerks cannot help here: the Western District of Kentucky notes that its clerk's office is prohibited by statute from giving legal advice or assisting with form preparation.

• My certificate is dated more than 180 days ago. Do I need to retake the briefing?
• A sale or garnishment is scheduled this week. Does my situation fit the § 109(h)(3) certification, and what evidence would the court expect?
• Would a § 109(h)(4) waiver for incapacity, disability, or combat-zone duty apply to me?
• In a joint filing, what does each spouse need to complete and document?
• How does this district want the certificate docketed, and what happens if it is filed the wrong way?
• Is filing now the right timing at all, or does waiting change the analysis?

Frequently asked questions

How long is a credit counseling certificate good for?

The briefing must have been received within the 180 days preceding the date you file. The District of Maryland states the certificate must reflect that the counseling was received within that 180-day window. If the case is not filed within that period, the briefing generally has to be repeated before the petition can be filed.

Can I take the course after I file if something urgent is happening?

Only in narrow circumstances. Under 11 U.S.C. § 109(h)(3), a court may allow it if you requested counseling from an approved agency but could not obtain it during the five-day period beginning on the date of the request, exigent circumstances merit a waiver, and you file a satisfactory certification of those facts with your petition. The District of Colorado warns most debtors will not meet these conditions.

Does the course have to be in person?

No. The District of Maryland states the briefing may be conducted online, over the phone, or in person. The District of Colorado notes the course can be taken on a computer or by telephone and suggests a public library if you do not have a computer. What matters is that the provider is approved by the United States Trustee for your district.

What happens if I file without it?

Courts describe dismissal. The District of Maryland warns that without counseling and without meeting the requirements for an extension or exemption, your case will be dismissed and you will not receive a discharge; in some cases you may not be permitted to file again for 180 days, or automatic stay protection in a later case may be limited. Section 707(a) also permits dismissal for cause.

Is there an exception for disability or military service?

Yes, under 11 U.S.C. § 109(h)(4), requested by motion. The District of Colorado describes exemptions available for the mentally ill or disabled, or persons on active military duty in a combat zone. E.D.N.Y. LBR 1007-2 requires such a motion to be made on notice to the trustee and the United States trustee and supported by documentary evidence.

Does a debt-relief company's counseling count?

Not unless that provider appears on the United States Trustee's approved list. Under 11 U.S.C. § 111, the clerk maintains a publicly available list of currently approved nonprofit budget and credit counseling agencies, and approval follows a review process with a probationary period. Courts consistently direct filers to that list rather than to any provider offering a course.

Do both spouses need to complete it in a joint case?

Court filing checklists treat the requirement as individual. The Northern District of Illinois and District of Alaska checklists both state that if you are married and filing jointly, the listed information is required for each spouse. The District of Colorado's notice addresses debtors and spouses in a joint petition together. A local attorney can confirm how your district handles the documentation.

Sources

• 11 U.S.C. § 109 — Who may be a debtor · official source
• 11 U.S.C. § 111 — Nonprofit budget and credit counseling agencies; financial management instructional courses · official source
• 11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
• Bankr. D. Md. official guidance — Credit Counseling Warning!
• COB official material — Credit Counseling is required BEFORE you file for Bankruptcy
• U.S. Bankr. Ct. N.D. Ala., Filing Certificate of Credit Counseling
• Bankr. W.D. La. official page — Credit Counseling and Financial Management (Debtor Education)
• N.D. Fla. LBR 1007-1
• E.D.N.Y. LBR 1007-2
• Bankr. S.D. Ind. official page — Motion Requesting Temporary or Permanent Waiver of Credit Counseling Requirement
• Bankr. S.D. Ind. official page — Motion to Extend Time for Credit Counseling
• Bankr. D. Minn. official guidance — Chapter 13 Process for Debtors without an Attorney
• Bankr. D. Mass. official guidance — Certificate of Credit Counseling
• Bankr. W.D. Ky. official guidance — Guide to Filing Bankruptcy without an Attorney
• Bankr. N.D. Ill. official page — eSR Chapter 13 Checklist
• U.S. Bankr. Ct. D. Alaska, Chapter 13 Pre-filing Checklist
• 28 U.S.C. § 1930(a)(1)(A), (f)(1)
• 28 U.S.C. § 1930(a)(1)(B)
• Bankruptcy Court Miscellaneous Fee Schedule, Item 8
• Bankruptcy Court Miscellaneous Fee Schedule, Item 9

Related

• Build your personalised roadmap
• Find your local bankruptcy court
• Chapter 7
• Chapter 13
• Which debts get discharged
• Is bankruptcy right for me?