Do I Really Have to File a Credit Counseling Certificate When I File Bankruptcy?… And What Happens if I Don’t?

A few months ago, Jonathan Ginsberg posted an article on these pages about what happens if you fail to complete a financial management course.

As Jonathan pointed out, if a bankruptcy case is filed without the certificate that you completed the financial management course, and the case is closed without a discharge, most judges will permit you to reopen the case so you can file the certificate. Recently, however, one bankruptcy court in Virginia refused to reopen a case to allow the debtors to get their discharge.

In a case before Judge Robert G. Mayer, in the Eastern District of Virginia, the chapter 7 debtors completed their credit counseling course well before the deadline to file the certificate, but they and their attorney neglected to file the certificate until one day after their case was closed. They paid to reopen their case, but Judge Mayer refused to allow them to reopen it.

The judge said that they and their attorney were responsible for not filing the certificate in time, and that their only option was to file a new bankruptcy petition. To file a new petition will cost them at least an additional filing fee, and absent an order from the court, the automatic stay will only last for 30 days.

Filing the credit counseling certificate in time is just one of the many booby traps in the current bankruptcy law. You can find many others on this website.

Perhaps after the November election, the new Congress and the new President will have the wisdom and strength to resist the pressure from the banking lobbyists and make the bankruptcy laws reasonable and responsive to the needs of the American economy and its citizens.