Credit Counseling Requirements for Bankruptcy

What are the Credit Counseling Courses?

Before you can be eligible to file for chapter 7 or chapter 13 bankruptcy, you must complete two separate counseling courses. To prove that you properly completed the course you must receive a certificate of completion.

In 2005 Congress changed the bankruptcy laws to make credit counseling and debtor education courses mandatory to receive a bankruptcy discharge. §109(h) provides that a debtor will no longer be eligible to file under either chapter 7 or chapter 13 unless within 180 days prior to filing the debtor received an “individual or group briefing” from a nonprofit budget and credit counseling agency approved by the United States trustee or bankruptcy administrator.

The Purpose of the Pre-filing Credit Counseling Course

The intended purpose of the credit counseling course is to help you determine whether bankruptcy is right for your situation. The counseling agency helps you prepare a budget based on your income and expenses and then will review with you your options for repaying the debt. In most cases, the agency confirms that bankruptcy is your best option but not always. However, even if the agency doesn’t suggest bankruptcy you’re not required to adhere to their decision. The law only requires that you complete the counseling not follow their suggestion.

Credit Counseling Costs

There are many agencies that are approved by the United States trustee or bankruptcy administrator and the cost can vary greatly, from approximately $15.00 to $50.00. Two (2) courses are required the second course is usually slightly cheaper than the first one.

Debtor Education Course

This is the second course and is required to be completed after filing your case but within 45 days of your 341(a) meeting with the trustee. If you don’t complete this second course, the trustee will not approve your discharge. The purpose of this course is to educate the debtor to make more sound financial decisions in the future to prevent you from becoming insolvent yet again. Once this course is completed you must file it with the bankruptcy court.

Ways to Complete the Courses

There are a couple different ways to complete these courses. The first and easiest way is to complete it online, the next is to complete it over the phone, and the final way is in person in a group setting. The in-person courses are usually much more expensive due to covering the cost for the instructor. After each course you will receive a certificate of completion. You should forward this certificate to your attorney for filing with the court.


Although, the courses are two more hoops to jump through to obtain your bankruptcy discharge, it is necessary, and usually doesn’t take longer than 90 mins to complete. All in all, it is painless and you can learn some helpful tips for life after bankruptcy. If you have any further questions, please contact our office.

What Documents Do I Need To File For Chapter 7 Bankruptcy?

A quick google search can provide an overwhelming amount of information about Chapter 7 Bankruptcy.  Although it is important to do your research do not be overwhelmed by the amount of information available on the internet.  Like a lot of information online, not all of it is correct and, in most cases regarding legal issues, the information might not pertain to your specific situation.  For example, what is true for someone living in Texas could be very different for someone living in New York; even if their legal issue is the same.

In order to properly prepare your Bankruptcy Petition (which is filed with the Court) our bankruptcy attorneys will request documents from you that will assist us in completely understanding your financial situation.  At Balmer Black, our Bankruptcy Attorneys will assist a bankruptcy client with completing our client specific Bankruptcy Questionnaire.  This questionnaire is used internally to provide our firm with detailed financial information so that our attorneys can properly prepare your Bankruptcy Petition for filing.

In addition to the questionnaire, there are specific documents that are required as part of your Bankruptcy both by our office and the Bankruptcy Trustee (The Trustee is appointed to oversee your Bankruptcy Case).  And, it is important to note that every Trustee is different and may require different documents.  For example, one Trustee may require three months of bank statements while a another Trustee will request four months of statements.

In order to give you an overview of the most common documents requested in conjunction with a Chapter 7 Bankruptcy, our attorneys have complied a list of the most commonly requested documents in New York:

1) Proof of income for the last 3 months, if applicable.

If you or your spouse did not work for the entire 60-day pre-petition period, then an Affidavit will be prepared for you or your spouse to sign, explaining that there was no income for a certain period of time.

2) Federal and State income tax returns for the two previous years.

3) Credit Counseling Certificate.

4) Additional Documentation that may be requested:

–   Deeds to houses/land

–   Purchase contracts for mobile homes

–   Titles to vehicles

–   Proof of insurance for houses/vehicles

–   Proof of values of land/houses (tax assessments/appraisals)

–   UCC1 documents that place liens on personal property (e.g. furniture, 4 wheeler etc.)

–   Proof of any child support obligations

–   Retirement plan/loan information (monthly payments & proof deductions)

–   Life insurance documents

The above list is meant to provide you with a basic, general overview of what documents may be required as part of your Chapter 7 Bankruptcy.  Every Trustee and case is very different so in order to determine what documents you will need to file Bankruptcy you can contact one of Balmer Black’s experienced bankruptcy attorneys today to discuss your situation.

As always, you can contact our office by visiting the following link

We look forward to hearing from you!

What is the Meeting of Creditors/341 Hearing?

Part of the process of Bankruptcy is the 341(a) hearing, otherwise known as the meeting of creditors. This is a public meeting that is a requirement set forth in the bankruptcy code and it is necessary to receive your discharge. Essentially, the 341 hearing is a meeting with your appointed trustee during which the creditors can be present and they both have the right to ask you questions. The trustee that is appointed by the bankruptcy court administers the hearing; there will not be a bankruptcy judge present. During this hearing the trustee will ask questions regarding your finances past or present to ensure that your paperwork is accurate and that there hasn’t been any fraud committed.

What is the purpose of this meeting?

The purpose of the meeting is for the trustee to determine if your paperwork is in order and to do some fact-finding regarding your case. Your attorney will appear with you at this hearing. Theoretically, your creditors have the right to be present to challenge the dischargability of their particular debt. Practically speaking however, if your debts are mainly consumer debts the creditors do not actually show up. In 99% of the cases, the creditors do not bother appearing at the 341 hearing.

When is the 341 hearing?

In a chapter 7 case, the 341 hearing is set by the court usually roughly 30 days after your petition has been filed. It can be set as soon as 21 days but no later than 40 days after the filing of your petition. Depending on where your case is filed determines where your meeting will be. For example, if you filed in the Southern District Bankruptcy Court, your hearing will likely be located in New York City.

What should you bring to the Meeting of Creditors?

First and foremost you must bring your social security card and Photo ID (either State Driver’s License, ID, or Passport). These items are to prove that you are actually the named debtor in the petition.  If you do not have these items on your scheduled date, the trustee will not conduct the meeting, you will have to reschedule and return once you have them.  Each trustee may request different items, they will inform your attorney what documents they want to review, if you don’t have an attorney they will inform you directly. Some of these items include:

  • Title to house;
  • Title to any vehicles;
  • Pay stubs or proof of public assistance;
  • Bank statements;
  • Balance of any retirement funds;
  • Tax returns;

Your attorney should provide these items directly to the trustee before the hearing, as well as bring them to the meeting. If for some reason you do not have them, then you will be required to either return at a later date or provide them to the trustee by a certain date so you don’t have to return.

What to expect at the meeting?

The meeting will be pretty informal and will likely last anywhere from 5-20 minutes. The trustee will ask certain questions about your financial situation and your paperwork. Usually the questions are pretty standard, but they can vary depending on your situation. Types of questions that the trustee could ask are:

  • Are you the debtor listed in the petition?
  • Why are you filing bankruptcy?
  • Have you listed all your assets in the petition?
  • Whether you have paid any creditors within 3 months of your filing?
  • Have you repaid any friends or relatives in the last year?
  • Does anyone owe you money?
  • Do you have any pending litigation where you are a Plaintiff? (Could you receive any money).
  • How you determined the value of your property listed in the petition?
  • Whether your income is accurate on your schedules and means test?
  • Whether you have dependents?
  • When was the last time you used any credit cards?
  • Whether you owe any child or spousal support?
  • Whether your monthly expenses are necessary and reasonable?

This list does not include everything that the trustee might ask, only some of the questions. If you are not sure how to answer any question that is asked, your attorney may advise you.


Overall, the 341 meeting is nothing to be intimidated by, it is just a part of the process. More often than not it is very brief and most people are surprised with how informal it is. As long as you are being honest with the information that you provide to the Trustee you will have nothing to worry about. Because Bankruptcy can involve complex legal issues, it is always best to consult with an experienced Bankruptcy attorney.



The above post was written by Joshua C. Sibenik, Esq.

Will I Lose My House or Apartment If I File For Bankruptcy?

If you, like many others, are dealing with a substantial amount of debt then you might be considering filing for Bankruptcy. A very common question that many of our potential Bankruptcy clients ask us is: What Will Happen to My House? And, Will I Lose My Home If I File For Bankruptcy?

Filing for Chapter 7 Bankruptcy

For purposes of our article we will focus on Chapter 7 Bankruptcy. For more information on Chapter 7 and Chapter 13 Basics you can take a look at our blog post “Bankruptcy 101”

As discussed in the above article, Chapter 7 is a total liquidation of qualifying debts and as part of your Petition, the documents filed with the Bankruptcy Court, you must list your assets; which is where your home can come into play.

So What If I Rent My Home or Apartment?

If you rent your home or apartment bankruptcy should have no effect in regard to your current lease. Technically, your home, condo, or apartment, if it is rented, is not an asset because you do not own it and you do not have the ability to sell or borrow against a rental property.

So What If You Own Your Home?

The short answer is…. Maybe. I know that is not the answer that you were looking for, but there are some factors that we have to consider before determining whether or not you will be able to keep your home and still file for a Chapter 7.

It is all about the Equity That You Have In Your Home

No Equity? – First off, the Trustee will not require that you sell your home if there is no equity in it. Basically, if the balance due on your mortgage is more than the current fair market value of your home then you have no equity.

Equity in your home? – Having equity in your home is a good thing! This means that the balance due on your mortgage is less than the fair market value of your home. So, technically, if you were to sell your home today you would walk away with some cash. Now, in regards to Chapter 7 Bankruptcy, this could cause a potential issue. Why is that? Because the Trustee sees the equity as a way that you can pay back some of your creditors if you were to sell or borrow against your home. Therefore, the Trustee can force you to sell your home to pay back your debts.

The Homestead Exemption Can Save Your Home!

If it is determined that you do in fact have equity in your home it does not automatically prohibit you from filing for Chapter 7 Bankruptcy, but does potentially give the Trustee the ability to sell your home to pay back your creditors. The Homestead Exemption is very important because it allows a debtor with under a certain amount of equity to file for Chapter 7 and save their home.

How much is the Homestead Exemption and How Do I Know If I Qualify?

If the home in question is your primary residence, federal and state laws may allow you to exempt the equity in your home; thus, preventing the Trustee from selling your home to pay creditors.

In New York, the Homestead Exemption is up to $165,550.00 for the following counties: Kings, New York, Queens, Bronx, Richmond, Nassau, Suffolk, Rockland, Westchester, and Putnam; $131,325 for the following counties: Dutchess, Albany, Columbia, Orange, Saratoga, and Ulster; $82,775 for the remaining counties in the state.


If you are considering Bankruptcy and you worried about saving your home an experienced bankruptcy attorney can help you determine whether or not the Homestead Exemption applies to your situation. Also, if your primary concern is saving your home and the Homestead Exception doesn’t apply to you, our expected team of attorneys can discuss with you alternatives to bankruptcy.



What is Chapter 13 Bankruptcy? The Basics

There are two types of consumer bankruptcy, Chapter 7 and Chapter 13. While chapter 7 is a liquidation and discharge, chapter 13 is a re-payment plan. There are reasons a person may choose chapter 13 over chapter 7 and there are reasons a person must choose chapter 13.

Chapter 13 Basics

Chapter 13 is also referred to as a “wage earner’s” plan. It allows individuals who may not qualify for chapter 7 to still obtain relief of bankruptcy, albeit under different circumstances. Under this chapter debtors propose a repayment plan to the court agreeing to make installment payments to creditors over the course of a 3 or 5-year plan. If the debtor’s income is less than the applicable state median, the plan will last 3 years unless the court approves a longer period “for cause.” If the debtor’s income is above the median income, the plan must be for 5 years. In no case, can a chapter 13 plan extend longer than 5 years. During the repayment plan the law prohibits creditors from starting or continuing collection efforts.

Advantages of Chapter 13

  • Save your Home
    • Chapter 13 offers certain advantages over Chapter 7, one of the main advantages is that it offers the debtor the opportunity to retain their home from foreclosure. By filing under this chapter debtors can cease foreclosure proceedings and cure delinquent mortgage payments over time. But it is important to note that they must make all timely payments on their mortgage throughout the course of the plan.
  • Protect 3rd Party debtors –
    • By agreeing to repay the debt, you protect a cosigner on a loan from the creditor attempting to collect against them.
  • One Easy Payment-
    • Finally, under chapter 13 the plan acts like a consolidated loan where the individual makes the payments directly to the trustee who then distributes the payments to creditors.

Chapter 13 eligibility

Any individual, even if self-employed or operating an unincorporated business, is eligible for chapter 13 relief as long as the individual’s unsecured debts are less than $383,175 and secured debts are less than $1,149,525. These amounts are adjusted periodically to reflect changes in the consumer price index. Only individuals are eligible for chapter 13, not corporations or partnerships.

An individual can’t file chapter 13 if during the preceding 180 days a prior a bankruptcy petition was dismissed due to the debtor’s willful failure to appear before the court, the debtor filed to comply with orders of the court, or the bankruptcy was voluntarily dismissed after creditors sought relief from the court to recover property upon which they hold liens.

An individual may not file chapter 13 if they have not completed the required bankruptcy educational courses, one pre-filing and one post-filing.

What do you need to file?

In order to complete the Official Bankruptcy Forms that make up the petition, statement of financial affairs, and schedules, the debtor must compile the following information:

  1. A list of all creditors and the amounts and nature of their claims;
  2. The source, amount, and frequency of the debtor’s income;
  3. A list of all of debtor debtor’s property; and
  4. A detailed list of the debtor’s monthly living expenses, i.e., food, clothing, shelter, utilities, taxes, transportation, medicine, etc.

What happens once the case is filed?

Once the case is filed, an impartial trustee is appointed to oversee the case. The trustee both evaluates the case and serves as a disbursing agent, collecting payments from the debtor and making distributions to creditors.

Filing the petition “automatically stays,” or stops most collections actions against the debtors or debtor’s property. Filing the petition does not stay all actions, and for certain actions it may be effective for only a short time. Chapter 13 also contains a special automatic stay provision that protects co-debtors as well.

Meeting of Creditors

Between 21 and 50 days after the debtor files the chapter 13 petition, the chapter 13 trustee will hold a meeting of creditors. The debtor must attend the meeting during which the trustee places the debtor under oath, and both the trustee and creditors may ask questions.

Approval of the Plan

A payment plan must be submitted to the court within 14 days of the filing of the original petition.  No later than 45 days after the meeting of creditors, the bankruptcy judge must hold a confirmation hearing and decide whether the plan is feasible and meets the standards set forth in the bankruptcy code.

Once the plan is approved, the individual must then make all the payments under the payment plan. Once all the payments are made, the court will order the discharge and free you from any unpaid debts and possibly other debts


Chapter 13 is a bit more complex and involved than chapter 7, but for those that aren’t eligible for chapter 7, it can be the best way to be relieved from debt that has you feeling buried.



The above post was written by Joshua C. Sibenik, Esq.

Is Bankruptcy For Me?

Often people find themselves in difficult financial positions and wonder, is Bankruptcy my way out? This is a valid question. For some people who have limited income with bills piling up, the answer is yes. However, for some situations bankruptcy isn’t the best answer.

Bankruptcy relief in principle is a second chance for a fresh start. For people who will never have the means to pay back all of their debts, it is a way out. It is the “break glass in case of emergency” for financial trouble. However, many people with a relatively small amount of debt immediately jump to bankruptcy without weighing all of their available options. For example, in almost every situation, someone with under $10,000.00 of debt, bankruptcy is not worth it (except for extreme circumstances). For chapter 7 cases, once you receive a discharge you will not be able to receive another discharge for 8 years. So it’s possible you could file bankruptcy, and immediately after have some life event that causes you to be back in debt. Then you would be forced to wait at least 8 years to file bankruptcy again. The other option to consider is debt settlement.

What is debt settlement?

Debt settlement is negotiating with your creditors to settle your accounts in full for less than what is owed. Basically, you would attempt to convince your creditors that it is in their best interest to accept a lesser amount of what is owed. The effectiveness of settling these debts depends on a multitude of factors, such as, status of the accounts, amount of total debt, type of income, amount of income, and total assets. If your accounts are past due and delinquent, the creditors assume you are considering bankruptcy and are much more willing to accept something rather than having their debt discharged in bankruptcy and getting nothing. However, if you are current on accounts, creditors will be less likely to settle.

Advantages of debt settlement over Bankruptcy

One of the main advantages of debt settlement over bankruptcy is that it will save your credit score. Although, settling your accounts for less than what is owed may not as positively affect your score as if you paid them in full, it is still more beneficial to your score than filing bankruptcy. If you were planning on obtaining a loan in the near future to purchase a home or vehicle, bankruptcy could make that difficult.

Another reason debt settlement may be better than bankruptcy, is that it is easier than bankruptcy. Bankruptcy is an involved process, although your attorney will complete the petition necessary to file, it will still require dedication on your end. You must provide necessary paperwork for the trustee to review. Essentially, it is an in depth look at your financial situation requiring tax returns, bank statements, pay stubs, titles to vehicles or homes, completion of financial management courses, in addition to taking time out of your schedule to appear at the meeting of creditors with your attorney. Although some of these items would help with debt settlement none of these them are required.


Whether or not to file bankruptcy is a question that is different for every person. It is a decision that should be made carefully, weighing all the available options, such as, debt settlement. It is best to speak with an attorney that does both bankruptcy and debt settlement. That way you can be assured they are making the decision that is best for your situation and not just pushing you toward one or the other. An experienced attorney can explain the advantages and disadvantages of debt settlement and bankruptcy specifically tailored to your situation.

The above post was written by Joshua C. Sibenik, Esq.

Major Benefits of Filing For Chapter 7 Bankruptcy

During this article I will discuss the two main benefits of filing a chapter 7 bankruptcy. Bankruptcy is a serious and involved process, and should not be considered lightly. That being said, it does have two major benefits that may make it worth the time and effort to complete. These two benefits are the automatic stay and the discharge of debts.

Automatic Stay

The automatic stay is an automatic injunction that halts any collection efforts from creditors. The barrage of letters and phone calls from collectors can be extremely stressful, frustrating, and downright maddening. It can have a negative impact on you and your family’s life.

Once a bankruptcy petition is filed with the Bankruptcy court, the automatic stay goes into effect. This injunction demands that any creditors must cease ALL collection efforts. These collection efforts include repossession, wage garnishment, bank attachment, any active lawsuits, in addition to collection calls and letters. This is not an empty protection either; there are actual real consequences for creditors who violate this law in the form of fines, sanctions, or orders for contempt. The automatic stay allows much needed peace of mind for those seeking bankruptcy relief.

Debt Discharge

The other main benefit of filing bankruptcy is the discharge. In a chapter 7 bankruptcy, generally all unsecured debts and some secured debts are discharged or eliminated. Essentially, as long as there are no successful challenges from any creditors and the court doesn’t view any abuse has occurred in your case, the court releases the debtor personal liability on these dischargeable debts.

Unsecured debts are debts like medical bills, credit cards, personal loans (not secured by property), and social security overpayment or other government assistance. It is important to remember that there are certain debts that are non-dischargeable such as any federal or state taxes owed, any fines owed to the government, any obligations for child support or spousal support, student loans, attorney’s fees in child custody and support cases, and any criminal fines or restitution ordered by a court. This list is nonexclusive, meaning it does not include every non-dischargeable debt, only some.

The court ordered discharge offers you a second chance with a fresh start. As a condition of the discharge the court mandates that every debtor complete two separate credit and financial management courses. These courses educate the debtor on how to budget and be financially responsible so they don’t find themselves in the same situation again in the future. The discharge is granted to debtors once the case has concluded. This discharge can be denied or revoked due to fraudulent actions by the debtor, or failure to disclose all assets during the bankruptcy proceeding.


The automatic stay and debt discharge are by far the two major benefits of bankruptcy. Bankruptcy can be extremely beneficial due to these two aspects; however, it is not best for every situation. It is important to speak with a bankruptcy attorney regarding your specific financial situation to help you decide whether bankruptcy is in you and your family’s overall best interests.

The above post was written by Joshua C. Sibenik, Esq.

Bankruptcy 101

In today’s current economy many people find themselves in large amounts of debt. This can happen through no fault of their own due to a life-changing event such as, job loss, a catastrophic accident causing large medical bills, death of a spouse, etc. Poor management of finances could also cause this debt. If someone is feeling like there is no possible way to repay all their debts, its possible bankruptcy could be their best option. This article will briefly cover the basics of the bankruptcy process.

Who can file Bankruptcy?

Any consumer who is insolvent (too much debt to pay back), may be eligible to file for relief under the U.S. Bankruptcy code subject to the following exceptions:

  1. You received a chapter 7 discharge in the past 8 years, or a chapter 13 discharge in the past 6 years.
  2. A bankruptcy court may also dismiss your case if there is an attempt by the debtor to defraud creditors. Such as transferring assets to friends or           family in an attempt to hide them from creditors.
  3. You cannot file for bankruptcy if you had a chapter 7 or chapter 13 dismissed in the past 180 days for the following reasons:
  • You violated a court order.
  • The court ruled that your filing was fraudulent or was deemed an abuse of the bankruptcy system.
  • Debtor requested the dismissal after a creditor asked for relief from the automatic stay.

Chapter 7 v. Chapter 13
There are two types of consumer Bankruptcy, Chapter 7 and Chapter 13. Chapter 7 is the most common Bankruptcy filed by consumers. Chapter 7 is an opportunity for a “fresh start.” If the debtor qualifies, all of their unsecured debt is wiped away and they are given the option to keep or surrender property that is secured by a lien or mortgage, as long as certain conditions are met.
Chapter 13 on the other hand is reorganization Bankruptcy, which essentially is a repayment plan. The debtor would propose to pay back all or a part of their debts over the course of 3 to 5 years, after the assigned term all debts eligible for discharge will be wiped away.
There are two main reasons people decide to file a chapter 13 over a chapter 7. 1) They simply do not qualify for chapter 7; or 2) The debtor has valuable assets.

There are set strict income limits by state, if the debtor’s income is above those limits you do not qualify for Chapter 7, unless you pass the means test. If your current annual income is higher than the limits set by your state, you must pass the means test to file chapter 7. The means test determines whether you have enough disposable income to repay your debts over the course of a 5 year plan. If you do not pass the means test you will not be eligible to file chapter 7; however, you still may be able to file ch. 13.

Debt education course and financial management course

For both chapters, the court requires that you complete two separate online courses, one pre-filing and one post-filing. You may complete these courses online and file the certificate with the court. If you do not complete these course within the time deadline, your case will be dismissed.

The Automatic Stay

Once you decide which chapter you want to file, next is the automatic stay. Being in a large amount of debt is often very stressful. Not only are you under the stress of attempting to repay the debt, but also you endure various collector’s phone calls and letters. A fundamental benefit of filing bankruptcy is the Automatic Stay. Under bankruptcy law the automatic stay is an automatic injunction that halts actions by creditors, with certain exceptions, to collect debts from a debtor who has declared bankruptcy. Under section 362 of the United States Bankruptcy Code, the stay begins at the moment the bankruptcy petition is filed. This provides instant peace of mind once the bankruptcy petition is filed with the court.

Meeting of Creditors

After a chapter 7 petition has been filed, the court will appoint a trustee to oversee your case and take control of the estate. The estate consists of all your assets that are not exempt. At that time, the court will schedule the 341 meeting; this meeting will be about 20-40 days after the initial filing of the petition. The debtor must be present. This is an informal meeting with the trustee where all the debtor’s creditors are allowed to be present. 99% of the time none of the debtor’s creditors actually appear. The meeting consists of the trustee placing the debtor under oath and asking questions about the debtor’s property and debts. The process for chapter 13 is slightly different, there is a meeting of creditors, and then there is a confirmation hearing in court where a bankruptcy judge will either approve or reject your proposed plan.
Discharge of debt

For chapter 7, creditors are allowed 60 days from the 341 meeting to convince the court that their debt should not be discharged. Once that time lapses, all of the debtor’s dischargeable debts will be discharged. For chapter 13, once the payment plan has concluded your case will be closed.


It is important to remember that everyone’s situation is different. For many people bankruptcy may not be the best option. After considering all factors, it’s possible that settling debts individually over time could be the best option for you. It is always smart to consult with an attorney that practices bankruptcy and debt settlement, allowing you to consider every factor in your situation without forcing you toward one or the other.