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Personal Financial Management Instructional Course – A Big Bankruptcy Trap

Posted on Mar 28, 2009 in Bankruptcy procedures, BAPCPA, Chapter 13, Chapter 7

You must take a credit counseling course before you file a bankruptcy case.  This is sometimes called the “ticket in” to bankruptcy.  Bankruptcy attorneys are supposed to check to be sure that you’ve done this before you file your case.  So this is not much of a problem any more.

However, you must also take a “personal financial management instructional course” – I call it a financial management course myself – before your case closes in order to get a discharge.  This is sometimes called the “ticket out” of bankruptcy.  We spend a lot of time telling our clients to do this.  We remind clients to take the financial management course when we file their case.  We write emails and letters to them asking them to take financial management training.  We tell our clients to take the financial management instructional course in our engagement letters.  Surprisingly, some clients still don’t do this.

Bad idea.  Their case is then closed without a discharge.   The client contacts us.  We have to move to reopen the case.  That costs $250 just for the filing fee.  We have to charge our client an attorneys’ fee for this additional work.  We don’t like having to do that and we know that the client doesn’t like that either.

So, take the course.  Personal Financial Management Instructional Courses are actually a bargain.  You spend just a few dollars on this course and you may get some ideas which will really help you in your financial affairs in the future.  This may actually be the one aspect of the “Bankruptcy Abuse Prevention Consumer Protection Act” which actually was a good idea.


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