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Requirements for filing Chapter 7 bankruptcy

Debtors in South Carolina may benefit from learning more about the counseling and education requirements for filing for Chapter 7 bankruptcy. In order to comply with the requirements implemented by federal bankruptcy law, debtors are only permitted to receive counseling service from approved providers within the district. When debtors file at the clerk's office in their district, there is typically a list of approved credit counseling providers available, and the list is also available online.

Aside from the pre-bankruptcy counseling, debtors are also required to receive debtor education from an approved provider as well. The fee for this service may cost up to $100, and the sessions may last up to two hours. The counseling and education requirements may be completed online, by phone or in person. If debtors cannot afford the pre-bankruptcy counseling and education requirements, the provider or court may be able to waive the fees.

Debtors are responsible for obtaining the appropriate certifications for completing the counseling and education requirements necessary for the bankruptcy process. Applicants are required to file the certifications with the appropriate parties before debt can be discharged. A central automated system produces the certificates with identification numbers in an attempt to reduce the risk of fraud. Debtors are prohibited from completing pre-bankruptcy counseling and education requirements simultaneously. They must complete the counseling first, file for bankruptcy and then complete the debtor education requirements.

Debtors who need help with filing for Chapter 7 bankruptcy typically benefit from consulting legal counsel. Lawyers may be able to help explain the process and provide clients with more accurate expectations regarding the outcome. Bankruptcy lawyers may also be able to help such clients explore alternative debt relief options.

Source: FTC, "Counseling and Education Requirements", December 15, 2014

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