Overview

To help your understanding of the bankruptcy process, we have outlined everything you need to know and the steps that need to be taken when filing for bankruptcy. To learn more, continue reading or visit bkhelp.org.

Content

Bankruptcy & Debtor Certificates

As of 2005, a certificate of credit counseling completion is required before an individual can file for bankruptcy in the United States. Only credit counseling organizations that have been approved by the U.S. Trustee Program may issue credit counseling bankruptcy certificates. Each bankruptcy certificate is automatically generated, numbered and printed from a central classified system.

Credit.org is approved by the Executive Office for U.S. Trustees* (EOUST). Our government-approval grants our credit debt counselors official authorization to provide pre-bankruptcy counseling and debtor education courses to consumers in compliance with the new bankruptcy reform law of 2005. Once you have completed your pre-bankruptcy counseling session and debtor education course, you will be given the following certificates of completion – the certificates prove you have met the pre-bankruptcy counseling and course requirements to proceed with your bankruptcy discharge.

* Approved to issue certificates in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of an Agency’s services.

Nationwide Bankruptcy Counseling Services from credit.org

In order to file your bankruptcy petition you must complete a mandatory budget briefing session with an approved credit counseling agency. Once you have completed this session, credit.org will issue you or your attorney a Counseling Completion Certificate so your bankruptcy petition can get filed with the court.

Comprehensive Debtor Education Courses from credit.org

If you file a bankruptcy petition with the court, you will be required to complete an approved 2-hour debtor education course within a specific time from your § 341(a) Meeting of the Creditors in order to get debts in your bankruptcy petition discharged. If a Chapter 7 bankruptcy petition is filed, you will have 60 days to complete the approved debtor education course from the time of the § 341(a) Meeting of the Creditors. If a Chapter 13 bankruptcy petition is filed, the time allotted to complete an approved debtor education course could be much longer. If a Debtor Education Completion Certificate is not obtained by the required due date, the case may be closed by the court and the debts in your bankruptcy petition may not be discharged.

More Than Money Debtor Education Program

Credit.org offers EOUST-approved More Than Money Debtor Education Program (Approval does not endorse or assure the quality of an agency’s services).

Our More Than Money Debtor Education Program is geared to meet the two (2) hour debtor education requirements set forth by the Executive Office for U.S. Trustees (EOUST).

The 12-chapter instructional course covers the basics of Money Management, Budgeting and Proper Use of Credit as well as all other mandated topics per the EOUST.

3 Efficient Ways To Take Our Debtor Education Course

Telephone Classes:

Our More Than Money course is taught by a certified counselor via the telephone and is two hours in length. Each client will be registered, mailed a handbook and given a unique pass code to call in. A computer or Internet access is not required. A certificate will be issued upon completion of the course.

Internet:

Our More Than Money course is taken via the Internet and is two hours in length. Each client must be registered and mailed instructions on how to access the online course. A computer and Internet access is required. A certificate will be issued upon completion of the course.

In Person:

(Riverside headquarters only) Our More Than Money course is taught by a certified counselor in a comfortable setting and is two hours in length. Each client will be registered and must provide identification at time of attendance. A computer or Internet access is not required. A certificate will be issued upon completion of the course.

To learn more about the fees associated with the More than Money Debtor Education Program, read the Bankruptcy Fees section below.

Certified Bankruptcy Educators Striving For Excellence

We have NFCC Certified Counselors available to assist your clients who need comprehensive and professional pre-bankruptcy counseling and debtor education services. Our counselors consistently score excellent ratings when tested by our internal Quality Assurance department and independent regulators.

Our certified counselors often go the extra mile by providing clients with on-going support during the course of their Debtor Education program. As a company, credit.org wants to ensure your clients are equipped with a better understanding of the potential pit-falls of unsecured credit debt and help them begin the process of correcting their long-term money management habits. Our goal is for each client to graduate from our debtor education course with a stronger foundation to manage credit debt in the future.

Debtor Education in Spanish: Our debtor education course is available in Spanish. If you would like information about our counseling, click here or call 1-888-4BK-FILE (425-3453).

Bankruptcy Facts

The following bankruptcy information was taken from the federal bankruptcy law. Credit.org does not offer legal advice; the bankruptcy information on this page is offered for informative purposes only. We strongly recommend you seek professional legal advice if you decided to file for bankruptcy.

The Facts about Chapter 7 Bankruptcy

Chapter 7 is designed for debtors in financial difficulty who do not have the ability to pay their existing debts. Debtors whose debts are primarily consumer debts are subject to a “means test” designed to determine whether the case should be permitted to proceed under chapter 7. If your income is greater than the median income for your state of residence and family size, in some cases, creditors have the right to file a motion requesting that the court dismiss your case under 707(b) of the Code. It is up to the court to decide whether the case should be dismissed.

Under chapter 7, you may claim certain of your property as exempt under governing law. A trustee may have the right to take possession of and sell the remaining property that is not exempt and use the sale proceeds to pay your creditors.

The purpose of filing a chapter 7 case is to obtain a discharge of your existing debts. If, however, you are found to have committed certain kinds of improper conduct described in the Bankruptcy Code, the court may deny your discharge and, if it does, the purpose for which you filed the bankruptcy petition will be defeated.

Even if you receive a general discharge, some particular debts are not discharged under the law. Therefore, you may still be responsible for most taxes and student loans; debts incurred to pay non-dischargeable taxes; domestic support and property settlement obligations; most fines, penalties, forfeitures, and criminal restitution obligations; certain debts which are not properly listed in your bankruptcy papers; and debts for death or personal injury caused by operating a motor vehicle, vessel, or aircraft while intoxicated from alcohol or drugs. Also, if a creditor can prove that a debt arose from fraud, breach of fiduciary duty, or theft, or from a willful and malicious injury, the bankruptcy court may determine that the debt is not discharged.

Liquidation Fee: $299.
Credit.org’s Fee: To obtain your pre-petition counseling from credit.org, the fee is $55.00 by telephone or in person, and $45.00 by Internet. This is required if you plan to file a chapter 7. Click here to learn more or call credit.org at 1-888-425-3453 to speak to a counselor or schedule an appointment.

The Facts about Chapter 13 Bankruptcy

Chapter 13 is designed for individuals with regular income who would like to pay all or part of their debts in installments over a period of time. You are only eligible for chapter 13 if your debts do not exceed certain dollar amounts set forth in the Bankruptcy Code.

Under chapter 13, you must file with the court a plan to repay your creditors all or part of the money that you owe them, using your future earnings. The period allowed by the court to repay your debts may be three years or five years, depending upon your income and other factors. The court must approve your plan before it can take effect.

After completing the payments under your plan, your debts are generally discharged except for domestic support obligations; most student loans; certain taxes; most criminal fines and restitution obligations; certain debts which are not properly listed in your bankruptcy papers; certain debts for acts that caused death or personal injury; and certain long term secured obligations.

Repayment of All or Part of the Debts of an Individual with Regular Income (total fee $189). Additional Fee: To obtain your pre-petition counseling from credit.org, the fee is $55.00 by telephone or in person, and $45.00 by Internet. This is required if you plan to file a chapter 13. Click here to learn more or call credit.org at 1-888-425-3453 to speak to a counselor or schedule an appointment.

Other Chapters of Bankruptcy

Chapter 11 is designed for the reorganization of a business but is also available to consumer debtors. Its provisions are quite complicated, and any decision by an individual to file a chapter 11 petition should be reviewed with an attorney.

Reorganization Fee: $1000 filing fee, $39 administrative fee: Total fee $1039

Chapter 12 is designed to permit family farmers and fishermen to repay their debts over a period of time from future earnings and is similar to chapter 13. The eligibility requirements are restrictive, limiting its use to those whose income arises primarily from a family-owned farm or commercial fishing operation.

Family Farmer or Fisherman: $200 filing fee, $39 administrative fee: Total fee $239

More Facts about Bankruptcy

Bankruptcy Crimes and Availability of Bankruptcy Papers to Law Enforcement Officials.

A person who knowingly and fraudulently conceals assets or makes a false oath or statement under penalty of perjury, either orally or in writing, in connection with a bankruptcy case is subject to a fine, imprisonment, or both. All information supplied by a debtor in connection with a bankruptcy case is subject to examination by the Attorney General acting through the Office of the United States Trustee, the Office of the United States Attorney, and other components and employees of the Department of Justice.

WARNING: Section 521(a)(1) of the Bankruptcy Code requires that you promptly file detailed information regarding your creditors, assets, liabilities, income, expenses and general financial condition. Your bankruptcy case may be dismissed if this information is not filed with the court within the time deadlines set by the Bankruptcy Code, the Bankruptcy Rules, and the local rules of the court.

Bankruptcy Fees

Pre-Bankruptcy Counseling

By Telephone

The fee for a telephone session by one of our certified credit counselors is $55.00. The fee is good for either a single filer or joint filers if both attend the same session.
Call us 1 (888)-425-3453 to begin.

By Internet

The fee for an Internet session is $45.00. This fee is the same for either a single filer or joint filers if both attend the same session.

In Person

The fee for an in person session is $55.00 ($50 in Mississippi). This fee is the same for either a single filer or joint filers if both attend the same session.
Call to schedule an appointment.

Bankruptcy Education

Pre-discharge Debtor Education – By Telephone

The fee for a telephone session is $59.00. This fee is the same for either a single filer or joint filers if both attend the same session.
Call us 1 (888)-425-3453 to begin.

Pre-discharge Debtor Education – By Internet

The fee for an Internet session is $55.00. This fee is the same for either a single filer or joint filers if both attend the same session.

Pre-discharge Debtor Education – In Person

The fee for an in Person session is $59.00. This fee is the same for either a single filer or joint filers if both attend the same session.
Call to schedule an appointment.

Counseling and Education Combination Discounts

Counseling and Education – By Telephone (save $6.00)

The fee for a telephone pre-petition counseling session is $55.00. We offer a reduced rate for clients who return to credit.org for their pre-discharge debtor education requirement if they elect to declare bankruptcy. The fee for returning clients for debtor education by the telephone is $49.00. This is a savings of $6.00 for telephone counseling and debtor education off of our normal fees! These fees are the same for either a single filer or joint filers who attend the same session.

Counseling and Education – By Internet (save $10.00)

The regular fee for an Internet pre-petition counseling session is $45.00. We offer a reduced rate for clients who return to credit.org for their pre- discharge debtor education requirement if bankruptcy is what they elect to choose. The fee for returning clients for debtor education by the Internet is $35.00. This is a savings of $10.00 for Internet counseling and debtor education off of our normal fees! These fees are the same for either a single filer or joint filers.
Call us 1 (888)-425-3453 to begin.

Fee Waiver Policy

Credit.org will reduce or waive the pre-bankruptcy counseling and pre-discharge debtor education fees for debtors whose household income is less than 150% of the estimated poverty threshold for their applicable family size as published by the Bureau of the Census AND the debtor is unable to pay the fee based on the debtor’s budget analysis.

Disclosure: credit.org reserves the right to revise or change its criteria used to waive any fees under its pre-bankruptcy counseling services.

Attorney Partnerships

As one of the first agencies to receive EOUST approval*, our experienced certified counselors can quickly accommodate your clients Pre-Bankruptcy Counseling and Debtor Education requirements. Today, it’s critical for attorneys who provide bankruptcy filing services to partner with a government-approved agency (like Springboard) to obtain the required bankruptcy certificates of completion for their clients as fast as possible.

Partner Program

Your law office will receive immediate and long-term value if you decide to partner with Springboard. Partnering with us is not absolutely required to work with us – but it will make the process of certifying more than one of your clients easier and faster in the future. Our partners often get the most out of our state-of-the-art bankruptcy management system and comprehensive internal resources. We encourage you to take advantage of our bankruptcy partner program.

To find out more information about our attorney partner program or if you have questions about our bankruptcy counseling process and management system, please call us at 1-888-425-3453 or email us at bkfeedback@bkhelp.org.

To quickly get started, register on our bankruptcy website and start benefiting from our valuable partner resources today!

Partner Philosophy

Our bankruptcy department’s main objective is to help attorneys – help their clients complete the mandatory requirements to file a bankruptcy petition. Historically, Springboard focused on “win-win” negotiations between creditors and consumers. Now we extend that same “everybody wins” philosophy to working with bankruptcy attorneys and their clients.

Partner Systems

Here at Springboard, we care about your success as an attorney. We have created a state-of-the-art bankruptcy management system that will allow our certified credit counselors to handle thousands of Pre-Counseling telephone sessions each and every month, thereby serving you and your clients as efficiently as possible. Since October 17, 2005, our certified credit counselors have used our state-of-the-art bankruptcy management system to conduct thousands of Pre-petition Bankruptcy Counseling and Pre-Discharge Debtor Education sessions for hundreds of satisfied attorneys across the United States.

*Approved to issue certificates in compliance with the Bankruptcy Code. Approval does not endorse or assure the quality of an Agency’s services.

Pre-Bankruptcy Counseling Process For Attorneys

Our certified credit counselors understand how important your clients are to your law practice and the urgency of filing a petition. Our credit counseling management team has worked hard to prepare our certified credit counselors to help your clients facilitate their Pre-Bankruptcy Counseling requirement while educating them about budgets, spending plans and the bankruptcy process.

Counseling and education from credit.org will help your clients during their most difficult time; with bankruptcy turning their finances upside down, the financial literacy and budgeting help we offer will make it easier for them to make it through the bankruptcy process and get back on their feet quickly afterwards.

On average, the counseling process will take about 90 minutes, as required by the EOUST. Each session is confidential between your client and one of our certified counselors.

Step 1: Call credit.org

Your client calls in from their home or from your office. Our automated phone system will immediately connect your client with one of our certified counselors.

Step 2: Counseling and Education

Our counselor will begin by discussing the circumstances that led the consumer to consider bankruptcy and do a budget analysis with them, so that they will be more successful avoiding financial difficulty in the future. During the course of your client’s Pre-bankruptcy counseling session, our counselors are trained to:

  • Work with your client to create a livable household budget – which includes monthly net income, monthly household expenses, unsecured debts and secured debts;
  • Review a spending plan with the client, based on their household budget information – The goal of this spending plan is to show the client where they are today and how to adjust their budget, so that they will be more successful avoiding financial difficulty in the future;
  • Provide relevant local resources and referrals to non-profit organizations to assist your client in realizing their bright financial future;
  • Provide background education on bankruptcy law, credit counseling options and possible bankruptcy solutions.
  • Explain the debtor education requirement to the client and why they need it, and;
  • Offer your client a “Consumer Action Handbook” provided free of charge by the Department of Consumer Affairs.

Step 3: Completion Certificate

Once completed, our counselor will issue a completion certificate to the client. The client may specify how they wish the certificate to be delivered, (i.e. mail, email, or fax.). Register with us and you will also receive a copy of the certificate via your preferred delivery method immediately after their session has concluded.

Note: Collecting the pre-petition counseling fee: credit.org may reduce or waive the pre-petition counseling fee for debtors whose household income is less than 150% of the estimated poverty threshold for their applicable family size as published by the Bureau of the Census, and the debtor is unable to pay the fee based on the debtor’s budget analysis. Click here to review our fee waiver policy.

FAQ

Can creditors threaten to take my wages?

Yes. They can take up to 25% of your take-home pay. Filing bankruptcy can stop the wage assessment and probably wipe out the creditor’s claims entirely.

Can a bankruptcy stop creditors from calling me?

Yes. No creditor may contact you in any way after you file your bankruptcy petition. In most cases, your attorney will notify your creditors prior to filing the bankruptcy petition so the creditors stop calling you.

Can I keep a credit card out of my bankruptcy?

In most cases, you must include all your credit cards. There are some instances where you can keep a credit card, but you will want to discuss each situation with your attorney.

Do I need an attorney for bankruptcy counseling?

Yes or No. You can speak with a Bankruptcy Counselor and begin your Debtor Education course at credit.org before – or – after you meet with an attorney.

How does bankruptcy affect my credit?

It hurts your credit, but if you are considering bankruptcy, chances are your credit is already affected. Bankruptcy allows you to start to rebuild your credit.

Most people have difficulty obtaining credit within one year of the bankruptcy. You can buy a car at a high interest rate with a substantial amount down. After the first year, things get easier. Many mortgage lenders will grant you a loan at their lowest interest rates four years after the bankruptcy. Bankruptcy stays on your credit reports 7 to 10 years.

How long are the certificates valid?

The pre-petition bankruptcy counseling completion certificate is valid for 180 days and the pre-discharge debtor education is valid until your court ordered completion date for discharge.

How long does the bankruptcy process take?

In a Chapter 7, you attend the 341(a) Meeting of the Creditors approximately one month after you file your bankruptcy petition. You then receive the discharge about two months after that.

In a Chapter 13, you attend the 341(a) Meeting of the Creditors approximately 45 days after your bankruptcy petition is filed. The Confirmation hearing may be between 7 and 45 days after the 341(a) Meeting of the Creditors, depending on where your petition is filed. Once your plan is confirmed, you make your payments for three years and then receive the discharge.

Note: In either chapter, you will need to complete a pre-petition bankruptcy counseling session before you file bankruptcy and you must complete a debtor education course in order to receive a discharge on your bankruptcy.

How soon can I schedule a bankruptcy counseling appointment?

We have counselors standing by to take your calls. No appointment is necessary. Simply call us at 1-888-425-3453 to speak directly to a bankruptcy counselor.

How long will the counseling session take?

Under the new bankruptcy law, The Executive Office for United States Trustees requires that you participate in a counseling session that may take up to 90 minutes or longer. Sessions may be shorter or longer, depending on your situation, amount of information to be gathered, number of questions you ask, etc.

How long will the debtor education course take?

Under bankruptcy law, the Executive Office for United States Trustees requires that you participate in a 2-hour debtor education course.

How much does credit.org charge for their services?

Credit.org charges $55.00 (which covers single filers and joint filers if counseled in the same session) for the pre-petition bankruptcy counseling by telephone or in person, and $45.00 by Internet and $55.00 (covers single filers and joint filers if completed at the same time) for the Pre-discharge Debtor Education course. Both include completion certificates.

This fee covers single filers and joint filers, if counseled in the same session. In some cases, the fees may be waived. Combination discounts are also available if you purchase the Pre-petition Bankruptcy Counseling from us and return to our agency (after filing bankruptcy) for your Pre-discharge Debtor Education you will receive a discount on the Debtor Education course.

If I’m married, do we have to file together?

No. Sometimes only one spouse files, but that is an exception. You may be able to file without your spouse if you have been married a short time or have all the debt in your name alone. Your spouse will be involved in a Chapter 13 whether his or her name is on the petition or not.

Is credit.org approved by the US government?

Yes. Credit.org is approved to issue Pre-petition Bankruptcy Counseling and Pre-discharge Debtor Education certificates in compliance with the bankruptcy code. Approval to issue certificates in compliance with the Bankruptcy Code, the approval does not endorse or assure the quality of an agency’s service.

(Although credit.org is approved to issue certificates in compliance with the Bankruptcy Code, the approval does not endorse or assure the quality of an Agency’s services.)

Should I use an attorney to help me file bankruptcy?

For Chapter 7’s, that depends on your experience in reading forms, interpreting the U.S. Bankruptcy Code, and talking under pressure. For most people, the answer is yes. Attorneys do more than fill out the forms. They also attend the 341 (a) Meeting of the Creditors, negotiate with the creditors, advise clients about offers to accept or reject, and give legal advice in general. A paralegal can fill out the forms, but cannot represent the debtor or give legal advice about how to fill out the forms, or what the law says about your particular situation.

What happens when I go to court?

In the 341(a) Meeting of the Creditors, some creditors such as Sears or Best Buy may show up and ask about the property you bought from them. There is a trustee who reviews your bankruptcy petition and determines if you have any assets to give the unsecured creditors in Chapter 7’s. Your attorney, in most cases, may help you on your behalf with those creditors at these meetings.

What is a 60/60 Plan?

A 60/60 Plan is another type of debt management plan. A 60/60 Plan is a Less Than Full Balance (LTFB) DMP. Under bankruptcy law an approved nonprofit budget and credit counseling agency may propose to a creditor a payment plan on unsecured consumer debts of at least 60 percent of the debt over a period not longer than the original loan, or reasonable extension with a maximum repayment period of 60 months – hence a 60/60.

Submitting a LTFB DMP proposal to an unsecured creditor does not guarantee acceptance and the creditor may counter with an amount they would accept that is higher than the 60% proposal. Secured accounts like your house and car do not qualify for a 60/60 Plan. While some creditors may reduce interest rates in a DMP or 60/60 they usually do not eliminate the interest. Some creditors refer to the LTFB DMP as a Pre-Bankruptcy DMP. Credit.org’s 60/60 Plan (patent pending) will be available when the EOUST (Executive Office for United States Trustees) issues guidance on the administration of these plans.

What is a Bankruptcy discharge and how does it work?

One of the reasons people file bankruptcy is to get a “fresh start”. A discharge is a Court order which states that you do not have to pay most of your debts. Some debts cannot be discharged. For example, you cannot discharge debts for:

  • most taxes
  • child support
  • alimony
  • student loans
  • court fines, criminal restitution and personal injury caused by driving under the influence of alcohol or drugs

The discharge only applies to debts that arose before the date you filed. Also, if the judge finds that you received money or property by fraud, that debt may not be discharged. It is important to list all your property and debts in your bankruptcy schedules. If you do not list a debt, for example, it is possible the debt will not be discharged. The judge can also deny your discharge if you do something dishonest in connection with your bankruptcy case, such as destroy or hide property, falsify records, or lie, or if you disobey a Court order. You can only receive a chapter 7 discharge once every eight years.

No one can make you pay a debt that has been discharged, but you can voluntarily pay any debt you wish to pay. You do not have to sign a reaffirmation agreement or any other kind of document to do this. Some creditors hold a secured claim (for example, the bank that holds the mortgage on your house or the loan company that has a lien on your car). You do not have to pay a secured claim if the debt is discharged, but the creditor can still take the property.

What is a Debt Management Plan?

A Debt Management Plan (DMP) consolidates only unsecured debts. A consumer would still be responsible for negotiating terms with their secured creditors — such as a mortgage or auto lender. A DMP is not a loan. A standard DMP allows a consumer to consolidate all or most of their credit cards, medical bills and other unsecured debts into one monthly payment.

Each unsecured creditor is different and some offer voluntary “concessions” such as lowering interest rates, re-aging a delinquent account, or waiving late and/or over-limit fees. These concessions, if offered, vary significantly from creditor to creditor.

What is a Reaffirmation Agreement?

Even if a debt can be discharged, you may have special reasons why you want to promise to pay it. For example, you may want to work out a plan with the bank to keep your car. To promise to pay that debt, you must sign and file a reaffirmation agreement with the Court. Reaffirmation agreements are under special rules and are voluntary. They are not required by bankruptcy law or by any other law. Reaffirmation agreements:

  • must be voluntary;
  • must not place too heavy a burden on you or your family;
  • must be in your best interest; and
  • can be canceled anytime before the Court issues your discharge or within 60 days after the agreement is filed with the Court, whichever gives you the most time.

If you are an individual and you are not represented by an attorney, the Court must hold a hearing to decide whether to approve the reaffirmation agreement. The agreement will not be legally binding until the Court approves it. If you reaffirm a debt and then fail to pay it, you owe the debt as though there was no bankruptcy. The debt will not be discharged and the creditor can take action to recover any property on which it has a lien or mortgage. The creditor can also take legal action to recover a judgment against you.

When I file bankruptcy, do I have to go to court?

Yes. Whether you file a chapter 7 or 13 bankruptcy petition, you have to attend a § 341(a) Meeting of the Creditors in either chapter. These usually last less than one hour, but can last all day in a Chapter 13.

Summary

Because our counseling is free, confidential, and carries no obligation, the best course of action for anyone interested in filing for bankruptcy is to call and talk to a counselor. Besides the assistance, counseling and education provided, the counseling session will establish if bankruptcy is the right solution.

Get Started by sending us a message or visit bkhelp.org to learn more.