What Is Required
Section 109(h) of the Bankruptcy Code requires every individual debtor to receive credit counseling from an approved nonprofit agency within 180 days before filing a bankruptcy petition. This is a mandatory prerequisite -- you cannot file without it (except in limited emergency situations).
The counseling must include a discussion of:
- Your current financial situation
- Alternatives to bankruptcy
- A budget analysis
Finding an Approved Provider
The U.S. Trustee Program maintains a list of approved credit counseling agencies at justice.gov. Agencies are approved on a district-by-district basis -- make sure you use one approved for your district.
Most approved agencies offer counseling:
- Online -- Self-paced, 60-90 minutes. Most convenient option.
- By phone -- Live counselor, 60-90 minutes.
- In person -- Available but less common.
Cost
Typical fees range from $15 to $50. If you cannot afford the fee, agencies are required to provide services at reduced cost or free of charge. Ask about fee waivers when you contact them.
The Certificate
After completing the counseling, the agency issues a certificate. This certificate must be filed with your bankruptcy petition. Keep a copy for your records.
180-day window: The certificate expires 180 days after it is issued. If more than 180 days pass between counseling and your filing date, you must complete counseling again and get a new certificate.
This Is NOT the Same as Debtor Education
Do not confuse pre-filing credit counseling with the post-filing debtor education course (also called the "financial management course"). They are two separate requirements:
| Course | When | Purpose |
|---|---|---|
| Credit counseling | Before filing | Evaluate alternatives to bankruptcy |
| Debtor education | After filing | Financial management skills for fresh start |
Next Steps
Related Resources
Step-by-Step Guide -- Complete bankruptcy filing process
meanstest.org -- Means test for Chapter 7 eligibility
Chapter Choice -- Chapter 7 vs Chapter 13 decision guide