Your’re going to be filing a bankruptcy case, but you know that there’s a credit counseling obligation. Can you just file the case and then do it right away afterwards?

The answer to that question is certainly no. You’ve got to do your credit counseling before you file the case. Almost universally cases are dismissed when the bankruptcy judge has a chance to look at the timing and sees on the certificate of credit counseling that the credit counseling was completed after the filing of the bankruptcy. What happens then is the case will be dismissed and you’ve got to file a new case and pay a new filing fee, and sometimes you lose rights with the automatic stay.

This is because when you file a second case within a year you only get the automatic stay for 30 days and then you have to run into court and ask for permission to extend the automatic stay beyond that 30 day period. So not doing your credit counseling beforehand can be a big “gotcha” for debtors.

The good news is credit counseling is very easy to accomplish. It’s not expensive and it usually takes about an hour and you do it online, and there are dozens if not hundreds of authorized credit counseling providers that you can choose from to get it done.