Credit Counseling and Debtor Education are Required for Bankruptcy

Filing for bankruptcy can be a taxing process. There is a lot of paperwork involved. Plus, there are some requirements. 

All individual bankruptcy filers are required to complete credit counseling and debtor education. These may not be provided at the same time. You must do credit counseling before you file for bankruptcy. Debtor education is done after you file. Therefore, these courses cannot be taken in the same session. 

Regardless of which chapter of bankruptcy you choose (Chapter 7 or 13), you will need to submit proof that you have completed a credit counseling course and a debtor education course. If you are filing for bankruptcy as a business (such as Chapter 11 bankruptcy), you do not have to take these courses.

If you are filing a joint petition with your spouse, you will both be required to meet the credit counseling and debtor education course requirements. Someone who is filing an emergency bankruptcy petition might get an exemption, but other than that, there are very few exceptions. 

Credit Counseling Course

Bankruptcy is a drastic step to take. There is a lot at stake. You could lose significant assets, and your credit rating will suffer. That’s why a credit counseling course is required. It is meant to help you review your finances and make sure that bankruptcy is the right choice for you. If you fail to take this course, your case will likely be dismissed.

You will receive a certificate at the end of the course, which you will submit with your bankruptcy petition and other paperwork when you file. The course lasts about two hours and can be completed online.

Debtor Education Course

The debtor education course is taken after you file for bankruptcy. The purpose of this course is to help debtors develop better strategies for managing their finances. That way, they will learn what they can do to avoid bankruptcy a second time around. 

A certificate of completion for both credit counseling and debtor education is required before the filer’s debts can be discharged. The credit counseling organizations and debtor education course providers must be approved by the U.S. Trustee Program. No other entities can issue these certificates.

If you are filing under Chapter 7, the deadline for submitting the certificate depends on the date of the Section 341 meeting of creditors. You will need to submit the certificate within 60 days of the scheduled meeting date.

If you are filing for a different bankruptcy, you can submit your certificate at any time before making your final payment on the repayment plan.

Use a Good Bankruptcy Lawyer

Embarking on the bankruptcy process can seem daunting, but with the right guidance, it can be a pathway to financial freedom. A good bankruptcy lawyer can make a big difference by providing everything you need to complete the process as well as expert guidance along the way.