Yes, if you plan on filing for bankruptcy in Bergen County or anywhere in New Jersey, you are required to undergo mandated credit counseling prior to submitting your formal petition. Not only must this course be completed, but you must also ensure the course is completed through an accredited provider within 180 days of filing the case. This process is necessary to help filers determine whether or not this process is truly necessary. Every filer has to go through this, so don’t try to find a way out of it. A Bergen County bankruptcy lawyer can tell you why this step is important.
When Do I Attend Credit Counseling?
Credit counseling is a mandatory requirement that must be completed prior to filing for bankruptcy. The course must be completed with an approved provider within 180 days prior to filing for bankruptcy in New Jersey. This process is necessary to evaluate your current financial situation and determine whether or not alternatives may be a more appropriate option than bankruptcy. It is important to understand that you do not have to take the advice of the counselor. As such, you may file for bankruptcy even if there are other viable options.
You attend credit counseling before you submit the rest of your paperwork with your bankruptcy filing. Some people are annoyed by the requirement, but it really isn’t that hard to complete this course. The court can give you a list of approved providers, and then you can complete the course by phone or online. Once you complete the course, you get a certificate that can be filed with the rest of your bankruptcy paperwork. This requirement applies to all filers in Bergen County and throughout the U.S. Bankruptcy Court for the District of New Jersey.
Important Timing Requirements
- You must complete credit counseling within 180 days before filing
- The course must be completed through a provider approved by the U.S. Trustee Program
- You must receive a certificate of completion, which must be submitted with your filing petition
- Failure to include this certificate of completion can invalidate or delay your ling
Why Is Credit Counseling Required Before Filing for Bankruptcy in New Jersey?
The court does not want people filing for bankruptcy over and over again. These are supposed to be extreme circumstances. So credit counseling covers a variety of topics to teach you how to better manage your money and avoid having to file for bankruptcy again.
What Is Covered in a Credit Counseling Course
- Budgeting
- How debts are structured
- The importance of your debt-to-income ratio
- Alternatives to bankruptcy, like debt consolidation
- How can you protect your identity
- What you can do to rebuild your credit after bankruptcy
- What kinds of laws protect you as a consumer
How Credit Counseling Helps You Decide
- Reviews matters like your income, expenses, and total debt
- Helps determine if bankruptcy is necessary or appropriate for your situation
- Can allow you to negotiate payment plans with creditors
- Provides a full financial overview prior to filing
Do I Have to Attend Credit Counseling?
In most cases, yes. Attending and successfully completing credit counseling is a mandatory requirement for most bankruptcy cases in accordance with federal law. There are very few exceptions under which you do not have to complete this process.
Situations Where Credit Counseling May Be Waived
- You are currently serving active military duty in a combat zone
- You are incapacitated or disabled and unable to participate
- There are no approved providers available in your district
Will My Case Be Dismissed If I Don’t Go?
You cannot skip your credit counseling course. Everyone needs to go through it when they file for bankruptcy. Ignore the requirement, and your bankruptcy case is dismissed. This means that your debts won’t be discharged. You’ll still be responsible for everything that you owe, and your creditors will be able to come after you again. If you don’t want the work that you did to file for bankruptcy to be wasted, you need to complete your credit counseling class.
Consequences of Skipping Credit Counseling
- Your case may be automatically dismissed by the bankruptcy court
- You will not receive any debt discharge or protections
- Creditors may resume collection efforts against you
- You may be required to restart the entire filing process
What’s the Difference Between Credit Counseling and Debtor Education?
Bankruptcy filers in Bergen County and throughout New Jersey are also required to take a debtor education course. This is not the same as credit counseling, but some similar topics are covered. Debtor education focuses heavily on managing money and rebuilding after a bankruptcy filing. As with credit counseling, the goal here is to help filers avoid the mistakes that led to filing for bankruptcy in the first place.
Credit Counseling vs. Debtor Education
- Credit Counseling
- Completed prior to filing
- Evaluates the necessity of bankruptcy
- Required to begin the case
- Debtor Education
- Completed after filing but prior to discharge
- Focuses on long-term financial management
- Required step to finalize the bankruptcy process
Schedule Your Bergen County Bankruptcy Consultation
If you have any questions about bankruptcy and its requirements in Oradell, Emerson, Paramus, or any other location in and around Bergen County, the team at Boyd & Squitieri is here to answer them. Contact our dedicated legal team today to schedule a consultation and learn more about how a lawyer can help you with the bankruptcy process.