Filing for bankruptcy involves more than just submitting paperwork. It also involves completing two educational requirements designed to help individuals better understand their finances, their options and how to avoid bankruptcy in the future.
These courses are mandatory for most bankruptcy filers and must be completed through approved providers. Failing to meet these requirements can delay or even derail a bankruptcy case, so it is important to know what they involve and when they must be completed. If you’re thinking about filing for bankruptcy, being proactive about the first course in particular can help you benefit from meaningful debt relief fast.
Credit counseling
The first course involves credit counseling, and it must be completed before filing your bankruptcy petition. This session typically lasts about an hour and can be completed online, over the phone or in person. Its purpose is to help you explore alternatives to bankruptcy and to ensure that you understand the financial implications of your decision, should you move forward with filing. At the end of the course, you will receive a certificate of completion, which must be filed with the court. If you do not complete this step, your case may be rejected before it even begins.
Debtor education
The second course is a debtor education or financial management course. It must be taken after you file, but before the court grants your discharge. This session typically lasts a little longer than the credit counseling course — often about two hours. It focuses on helping you manage your finances after bankruptcy. Topics include budgeting, setting financial goals and using credit responsibly. This course also ends with a certificate of completion, which must be filed with the court in order to receive a discharge of eligible debts.
Both courses must be completed through agencies approved by the U.S. Trustee Program. There is typically a small fee involved, though fee waivers may be available for those who qualify. It is important to use an approved provider, as unapproved courses will not satisfy the court’s requirements.