All people who are filing for personal bankruptcy protection will be required by law to attend credit counseling courses. Two types of classes are necessary – credit counseling and debtor education. They cannot be taken simultaneously. If a couple is filing joint bankruptcy, each spouse must attend both classes. Some law firms specializing in bankruptcy may offer in house credit counseling services.
A debtor who is considering filing for bankruptcy must take the credit counseling course within the 180-day period prior to filing the petition for bankruptcy. Credit counseling agencies offering these classes must be approved by the United States Trustee Program. Pre-filing credit counseling focuses on the existing debt. The class should include a thorough review of the personal finances and explore alternatives that may be available to avoid filing for bankruptcy. A personal budget plan should be developed. Classes can be taken in person, online, and in many cases, over the phone. Fees are generally nominal. Depending on the client’s ability to pay, fees can be reduced or waived. A certificate of course completion must be submitted to the court with the filing paperwork.
After a petition for bankruptcy has been filed, additional debtor education will be required. This post bankruptcy instructional course deals with financial management for the future. The class should cover managing your money, formulating a budget, and using credit responsibly. If filing for Chapter 7 bankruptcy, this course must be taken within 45 days after the first meeting with the creditors and the bankruptcy trustee. When filing under Chapter 13, this debtor education class must be completed no later than the last payment as required by the bankruptcy plan or before filing a motion for discharge.
Filing for bankruptcy can be complex and confusing. An attorney specializing in bankruptcy and debt relief can help clients through the process.