NJ Bankruptcy Lawyer Discusses Mandatory Budget and Credit Counseling Briefing
Prior to filing a bankruptcy petition with the court, all individuals must complete a budget and credit counseling briefing during the 180 day period prior to the bankruptcy filing. The credit counseling agency must be approved by the U.S. Trustee’s Office, for the State of New Jersey. Each debtor must file with the bankruptcy court a certificate that was prepared by the credit counseling agency reflecting that the briefing was completed. Although there are various types of credit counseling, the required counseling is specifically created for the bankruptcy filing. You can find a list of approved counseling agencies for New Jersey HERE. There are approximately 45 approved nonprofit budget and credit counseling agencies for New Jersey.
The bankruptcy code requires that the approved counseling agencies permit an individual to obtain the briefing by internet and/or telephone. Depending on the agency, the average briefing takes approximately 1 ½ hours. There are agencies that conduct the briefing solely by the internet, solely by telephone, or a combination of the two. A married couple may complete the briefing at the same time, by using separate telephones. Generally, the counseling agencies request that an individual provide all financial information, including but not limited to, a list of the following: monthly income and wage deductions; monthly expenses; value of assets; list of all liabilities; amount of debt for each creditor; monthly amount paid to each creditor; and, any other budget information. Some credit counselors prepare a budget for the individuals. If the budget is prepared, the budget must also be filed with the bankruptcy court.
The briefing assists individuals with budgeting matters. Typically, the credit counselor provides suggestions for reducing certain expenditures and cost-cutting tips. The counselor will likely provide the individual with written information and/or website links that will benefit them in the future. There is no test and it is not pass or fail. The costs for the briefing varies. The average cost is approximately $50 for one and/or two individuals.
Personal Financial Management Course.
After the bankruptcy petition is filed and prior to discharge, each debtor must complete a personal financial management course. The court will not enter an order of discharge in either a chapter 7 or chapter 13 case, unless or until the course is complete. The requirements for the counseling agency is the same as the Budget and Credit Counseling Briefing Agencies. However, the agency must be approved by the U.S. Trustee’s Office, specifically for the Personal Financial Management Course. There are approximately 79 approved agencies with regard to the personal financial management course in New Jersey. The approved agency must permit completion of the course by Internet, telephone, and/or completing a packet of information. The course is specifically tailored for bankruptcy debtors. A debtor’s chapter 13 bankruptcy trustee may conduct the course at their office at no cost. Typically, the course takes two to three hours. The debtor must obtain a certification of completion from the approved agency. Thereafter, the debtor must complete and file a separate certification with the court, reflecting completion of the course. You can find a list of approved New Jersey Agencies here.
In general, the course teaches an individual about their budget after bankruptcy, how bankruptcy may affect an individual, and how to protect yourself from credit problems, in the future. Some of the topics that are taught may include the following:
- attitudes and emotions regarding money
- spending responsibly
- creating a financial plan
- creating new goals
- saving and investing money
- tracking your money
- protection from deceptive advertising
- consumer protection information and agencies
- monitoring credit reports; rebuilding credit
- the effect of bankruptcy; consumer rights and acts
- information about the type and cost of credit
- types of credit cards
- and, credit traps
Contact a Bankruptcy Lawyer in New Jersey
The New Jersey Bankruptcy Code specifies a number of requirements that you must follow when filing for bankruptcy. Credit counseling is just one of those requirements. Before deciding to file for bankruptcy, it is in your best interest to consult with an experienced bankruptcy lawyer in New Jersey. Robert Manchel of the NJ bankruptcy law firm, The Law Offices of Robert Manchel, can ensure that you comply with all requirements, thus allowing your bankruptcy to proceed without unnecessary delays. Please call today at (866) 503-5655 to discuss your options for seeking bankruptcy protection.