13 Dec Prepare to Pay if You Forget to Take the Financial Management Course
Recently I received a notice from the bankruptcy court that my client’s Chapter 7 case has been closed without the issuance of a discharge order because my client never completed his mandatory financial management course. This means that in order to get his discharge, my client will have to pay a filing fee of $260 plus attorney’s fees (I usually charge $240) to get his case reopened so that we can file his financial management certificate and he can receive his discharge.
While reasonable people can debate the merits of requiring bankruptcy debtors to spend the time and money to take two financial counseling courses – one must be completed prior to filing and the second after filing – it is clearly a waste of money to spend $500 because you did not get around to taking a $35 course that may take an hour or two of your time.
My colleague, Dan Press, suggests that you and your attorney should wait to file your financial management course right at the due date, which is 45 days after the 341 hearing. Dan points out that in the event that you unexpectedly incur significant post-filing debt, you may want to have your case closed without a discharge so that you can, in theory, file another Chapter 7 without having to wait the 8 years wait that the Bankruptcy Code mandates in cases where a discharge is entered. Dan’s suggestion, by the way, may not necessarily work in the district where you file and the Code may be changed in the future to disallow this, so check with your attorney about this “immediate refiling strategy.”
Note that there is a big difference between waiting to file your certificate and waiting to take your course. If you provide your lawyer with a Financial Management course certificate and your lawyer fails to file it on time, I think you should expect your attorney to bear the cost of paying the filing fee and filing to reopen your case. However, if you do not obtain your financial management certificate, this cost burden will fall upon you.
I can tell you from what I see in my practice that my clients often forget about the financial management course requirement despite a notice of this requirement in the filing confirmation notice they receive from the Clerk of Court and reminders from me. If you are represented by a high volume firm, or by a lawyer who only files a few cases a year, you may not get any reminders other than what you receive from the court.
I also advise my clients to send me a copy of their course completion certificates directly. In theory, most financial management course vendors will email me the certificate, but that assumes that the vendor copies down my email correctly and sends the form. One of the messages of the post-filing course is to take control of your financial future and taking control of important decisions like this is a good start.
by Jonathan Ginsberg, Ginsberg Law Offices, Atlanta
Jonathan Ginsberg, Esq.
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