Credit Counseling Certificate Guide

CREDIT COUNSELING CERTIFICATE

Pre-Bankruptcy Requirement Guide

PART 1: LEGAL REQUIREMENT

Reference: 11 U.S.C. Section 109(h)

1.1 Statutory Requirement

Under 11 U.S.C. Section 109(h)(1), an individual may NOT be a debtor under the Bankruptcy Code unless such individual has, during the 180-day period ending on the date of filing:

"received from an approved nonprofit budget and credit counseling agency described in section 111(a) an individual or group briefing (including a briefing conducted by telephone or on the Internet) that outlined the opportunities for available credit counseling and assisted such individual in performing a related budget analysis."

1.2 Key Requirements

PART 2: APPROVED AGENCIES

2.1 Finding Approved Agencies

The U.S. Trustee Program maintains a list of approved credit counseling agencies:

Website: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111

2.2 Agency Selection Criteria

When selecting an agency, verify:

☐ Agency is approved for the debtor's state of residence
☐ Agency offers the desired format (online, phone, in-person)
☐ Agency's fees are reasonable (free or low-cost required by law)
☐ Agency can provide certificate immediately upon completion
☐ Agency offers services in debtor's preferred language

2.3 Common Approved Agencies

(Verify current approval status before use)

PART 3: COMPLETION PROCESS

3.1 Before the Counseling Session

Debtor Should Gather:

☐ List of all creditors with account numbers and balances
☐ Recent pay stubs or income documentation
☐ Monthly expense estimates
☐ Recent bank statements
☐ Any collection letters or lawsuit documents

3.2 During the Counseling Session

The counseling session typically includes:

1. Introduction to Bankruptcy Alternatives
   - Debt management plans
   - Debt consolidation
   - Negotiation with creditors
   - Budget adjustments

2. Budget Analysis
   - Review of income
   - Review of expenses
   - Identification of potential savings
   - Assessment of ability to repay debts

3. Bankruptcy Overview
   - General information about bankruptcy chapters
   - Consequences of filing
   - Discharge and non-dischargeable debts

4. Certificate Issuance
   - Upon completion, certificate issued
   - Certificate valid for 180 days

3.3 Session Duration

3.4 Cost

• By law, agencies must provide services at no cost or reduced cost to those who cannot afford fees
• Typical fee range: $0 - $50
• Fee waivers available for those below 150% of poverty level

PART 4: CERTIFICATE INFORMATION

4.1 Certificate Contents

A valid credit counseling certificate must include:

☐ Debtor's full name (as it will appear on petition)
☐ Date counseling was completed
☐ Certificate number/reference number
☐ Agency name and approval information
☐ Statement that debtor received the required briefing
☐ Signature of agency representative

4.2 Sample Certificate Verification

PART 5: EXEMPTIONS AND WAIVERS

5.1 Exemptions from Credit Counseling

11 U.S.C. Section 109(h)(4)

Credit counseling is NOT required if the court determines, after notice and hearing, that the debtor is unable to complete the requirement because of:

☐ Incapacity: Mental illness or mental deficiency that renders the individual incapable of realizing and making rational decisions about finances

☐ Disability: Physical impairment that makes the individual unable to participate in counseling (in person, phone, or internet)

☐ Active Military Duty: Serving in a military combat zone

5.2 Temporary Waiver (Exigent Circumstances)

11 U.S.C. Section 109(h)(3)

A temporary waiver may be granted if:

1. Debtor describes exigent circumstances meriting a waiver
2. Debtor requested credit counseling but was unable to obtain services within 7 days
3. Debtor files a certification with the petition describing the circumstances

If Granted:

• Counseling must be completed within 30 days of filing
• Court may extend for additional 15 days
• If not completed, case will be dismissed

5.3 Exigent Circumstances Examples

☐ Foreclosure sale scheduled within days
☐ Utility shut-off imminent
☐ Wage garnishment starting immediately
☐ Eviction scheduled
☐ Vehicle repossession imminent
☐ Other: _________________________________

PART 6: FILING THE CERTIFICATE

6.1 With the Petition

☐ Certificate should be filed WITH the voluntary petition
☐ Attach as Exhibit to petition
☐ Ensure certificate matches debtor name exactly

6.2 Joint Cases

For joint debtor cases:

☐ BOTH debtors must complete credit counseling
☐ May attend same session or separate sessions
☐ Each debtor needs own certificate (or joint certificate)
☐ Both certificates must be filed with petition

6.3 If Certificate Not Available at Filing

If circumstances require filing before certificate is obtained:

☐ File certification of exigent circumstances
☐ Request temporary waiver
☐ Complete counseling within 30 days
☐ File certificate when obtained

PART 7: ATTORNEY CHECKLIST

7.1 Pre-Filing Verification

7.2 Certificate Filing Checklist

PART 8: CLIENT INSTRUCTION LETTER

[LAW FIRM LETTERHEAD]

Date: ____/____/________

To: [CLIENT NAME]

Re: Required Pre-Bankruptcy Credit Counseling

Dear [CLIENT NAME]:

Before we can file your bankruptcy petition, federal law requires you to complete a credit counseling course from an approved agency. This letter explains the requirement and provides instructions.

WHAT YOU NEED TO DO:

1. Complete the course BEFORE your filing date
   Your anticipated filing date is: ____/____/________
   You must complete the course before this date.

2. Use an approved agency
   Go to: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111
   Select an agency approved for [STATE]

3. Have these items ready:
   - List of all your debts with balances
   - Your monthly income amount
   - Your monthly expenses

4. Complete the course
   - Online courses typically take 60-90 minutes
   - You will receive a certificate upon completion

5. Send me your certificate immediately
   - Email to: [EMAIL]
   - Fax to: [FAX]
   - Bring to office

IMPORTANT:

• The certificate is valid for 180 days
• If filing jointly, your spouse must ALSO complete the course
• Do NOT file bankruptcy yourself without this certificate
• Keep a copy of your certificate for your records

COST:
Most courses cost $25-50. If you cannot afford the fee, agencies must offer a reduced fee or free service.

Please contact me if you have any questions.

Sincerely,

[ATTORNEY NAME]
[PHONE]

PART 9: TRACKING FORM

9.1 Credit Counseling Completion Tracking

Case: _________________________________

9.2 Certificate Information

Debtor 1:
| Field | Information |
|-------|-------------|
| Agency | _________________________________ |
| Certificate Number | _________________________________ |
| Completion Date | ____/____/____ |
| Expiration Date | ____/____/____ |

Debtor 2:
| Field | Information |
|-------|-------------|
| Agency | _________________________________ |
| Certificate Number | _________________________________ |
| Completion Date | ____/____/____ |
| Expiration Date | ____/____/____ |

PART 10: CONSEQUENCES OF NON-COMPLIANCE

10.1 Filing Without Certificate

If a petition is filed without a valid credit counseling certificate:

• Court may dismiss the case
• Automatic stay may not be in effect
• Filing fees may be forfeited
• Must refile with proper certificate

10.2 Case Dismissal

Most courts hold that the credit counseling requirement is jurisdictional:

• Failure to comply = automatic dismissal
• Cannot be waived by parties
• Must strictly comply

Template Version 1.0 - Updated January 2026
References: 11 U.S.C. Sections 109(h), 111; Fed. R. Bankr. P. 1007(b)(3), (c)