Debtors wishing to file bankruptcy are required to successfully complete a credit counseling course during the 180 days prior to filing bankruptcy. However, debtors that can show that they are incapacitated due to mental or physical disability may be exempt from this requirement. Under Sec. 109(h)(4) of the Bankruptcy Code, a debtor may be excused from the credit counseling requirement if he has an incapacity or a disability. Incapacity means that the debtor “is impaired by reason of mental illness or mental deficiency so that he is incapable of realizing and making rational decisions with respect to his financial responsibilities.” Disability means that “the debtor is so physically impaired as to be unable, after reasonable effort, to participate in an in person, telephone, or Internet briefing.” Debtors wishing to claim exemption from the credit counseling must get an order signed by a bankruptcy judge excusing them from this requirement. But before a debtor asks the court for an exemption from credit counseling, they need to be sure they can prove incapacity or a disability. Debtors are required to have completed credit counseling before their bankruptcy case is filed but the motion seeking exemption from this requirement cannot be filed until after the bankruptcy case commences. If the motion requesting exemption from credit counseling is denied then the debtor may find his case dismissed for failure to comply with the credit counseling requirement prior to filing bankruptcy.
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