What happens at the credit counseling session is the debtor enters information very similar to what they’ve given us to prepare the petition regarding what they’re making, what they’re spending, what their debts are, and what their assets are. And then the credit counseling agency has them read a series of documents as to what options they have in dealing with their debt. Whether it’s smart to do a bankruptcy. Whether it’s smart not to do a bankruptcy. Whether it’s better to do some kind of debt management repayment plan through their office or some other office.

Typically though when someone comes to us for a bankruptcy and they have to go to debt counseling as a requirement of filing, they’ve already made up their mind to file the bankruptcy and I haven’t had a client yet be convinced that they’re better off doing a debt management plan. But anyway, that’s the requirement. That’s the first requirement that must be satisfied before a case can be filed. And the typical fee, by the way, for that credit counseling session is $50.00 that the debtor has to pay directly to the credit counseling agency.

Number two, the second requirement is we need the most recent 60 days of paycheck stubs or pay advices from the debtor. Now, this could be in the form of paycheck stubs. It could be in the form of an unemployment statement. It could be in the form of a social security statement. Often a bank statement will show what kind of pay advices have been automatically deducted into their account.

This is required because if the 60 days worth of pay advices are not submitted to the court, the court can dismiss the person’s case on the 46th day after filing. This is obviously something we don’t want to happen. It has happened on occasion. Certain trustees are more particular about the pay advices than others so it’s always a good idea before a case is filed you have the 60 days of paycheck stubs or an affidavit to the fact that that person doesn’t have paycheck stubs in hand prior to filing.

Number three, in a chapter 7 bankruptcy case the debtor must have filed their most recent year’s federal tax return. This is important. This is another item that can get a case dismissed 46 days after filing if it hasn’t been done. Doesn’t mean that the tax return has to be filed before the case is filed, although I always recommend that that’s the best idea to guarantee the case won’t be dismissed. But the person just has to submit proof of filing within 46 days of filing the case.

Those are three significant requirements that must be done for a chapter 7 case to succeed under the current bankruptcy law.

See Also: Bankruptcy Lawyers Los Angeles