Amended Bankruptcy Rule 1007 changes Form 23 debtor education filing...

A December 1st 2013 bankruptcy rule change allows the approved provider of a debtor education course on personal financial management to notify the court that debtor completed the course requirement. The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act required debtors in chapter 7, 11, and 13 cases to file a Form 23 certification of course completion with the court in order to obtain a discharge of debt.

Be prepared for change.

The Supreme Court of the United States changed Federal Rule 1007 to permit the course provider to notify the court for debtor. If the course provider notifies the court, a debtor in chapter 7 or 13 does not have to file the Form 23 certification. If the course provider does not file the notice, then according to Rule 1007(b)(7)(A) debtor must file Form 23 or according to 4004(C)(1)(H) the court cannot not grant debtor a discharge. A debtor in chapter 11 must still file the certification if 11 U.S.C. 1141(d)(3) applies to that case.

In certain rare situations, some debtors may not want to receive a discharge because a discharge limits the ability to discharge future debt. See my 2-4-6-8 Discharge Rule for the time lines required between multiple bankruptcy discharges. Some debtors may need to file another bankruptcy shortly after the last case closes. In those cases the debtor, and if represented, the attorney should stand vigilant over the debtor education process to make sure debtor does not take the course unless debtor is ready to receive a discharge.