The changes to the bankruptcy code in 2005 required Las Vegas bankruptcy petitioners to complete financial management courses and submitting completion certificates to the clerk of the bankruptcy court. Many bankruptcy lawyers believe it’s an onerous burden, but debtors who don’t prove they met the requirement face all kinds of nasty consequences that aren’t worth facing.
Debtors who don’t prove they completed the course within 45 days of the 341 meeting with the creditors will have their cases dismissed without a discharge.
Fortunately, the dismissal is not with prejudice, which is what happens if the bankruptcy court concludes that the petitioner was trying to commit bankruptcy fraud. Instead, the debtor will have to start over, which means filling out more paperwork to reopen the case, filing it.
Reopening the case isn’t free, even if it doesn’t seem like the cost to the bankruptcy court should be that much. It usually costs between $200 and $300, depending on whether the case is a Chapter 7 or Chapter 13 case. The fee might be money you don’t have which is a serious problem that can delay your discharge. It may cost more in legal fees to reopen your case.
With a dismissed case, the automatic stay is lifted and foreclosure proceedings against homeowner debtors can begin. Other creditors can resume collection efforts on defaulted loans.
Some courts send out reminders; some do not. Do not rely on the court to remind you to meet your responsibilities. That’s your Las Vegas bankruptcy lawyer’s job.
One more aspect of the requirement for debtors to be wary of is that there are two courses, which can cause confusion. Debtors must take a “credit briefing course” before filing and the “financial management course” before the 341 meeting. Frequently, they will take the briefing course believing it’s the financial management course, and neglect the second requirement. This can cause an embarrassing mess, but if your lawyer tells you to take the course, do so. It’s not worth it to refile your case.
For more questions about bankruptcy in Las Vegas, please feel free to contact an experienced Freedom Law Firm Las Vegas bankruptcy attorney for a free initial consultation. Call us at 1-702-803-9251 to set up your free consultation