Making the decision to declare personal bankruptcy, whether it is Chapter 7 or 13, is not an easy one. It involves coming to terms with not being able to pay creditors and losing possession of some assets, but it also brings relief as Arizona debtors begin to regain control of their financial life. Once the decision is made, there are certain formalities that must be fulfilled before the bankruptcy petition is filed. Failure to do so could result in the petition being dismissed and causing additional distress to Arizona residents.
One of the seldom-mentioned requirements is completing credit counseling before filing for bankruptcy. This counseling should have been received within 180 days of filing for bankruptcy. If credit counseling is not received, not only is it possible that the case is dismissed without discharging debts, but also the protection offered against creditors under the Bankruptcy Code may be limited to 30 days if the petition is filed again within a year.
In case counseling is not completed, it may be possible to receive counseling after filing if a few conditions are met, including attempting to receive counseling from an approved company but being unable to and an emergency situation necessitating an immediate filing of the case. In addition to this, a certification proving the above mentioned provisions must be filed with the petition.
A waiver of this requirement is available in limited circumstances only and Arizona residents should not count on receiving it. Since it is possible to receive counseling over the phone, through the internet or in person, Arizona residents would benefit from completing the course before filing in order to save precious time and energy. Once it is completed, Arizona residents can continue on their journey to restart their financial life.
Source: The United States Bankruptcy Court for the District of Arizona "Credit Counseling Warning" accessed on Nov. 17