When you file for bankruptcy, one of the conditions of having your bankruptcy completed and your debts discharged is for you to meet with a credit counselor or attend an approved financial management class. Be certain that whatever class you sign up for is an approved course or the court will make you take another class. You will also need to meet a debtor education requirement.
Before you can file for either a Chapter 7 or a Chapter 13 bankruptcy, you will have to complete a credit counseling course. This has to be done within six months before you file the necessary paperwork. Again, the course you choose must be an approved course and may be taken in person, online, or over the phone. The certificate you receive when you finish your class is part of the paperwork you will need to start your bankruptcy file.
This course is designed to help you figure out if you have any other alternatives to paying your debts, other than filing for bankruptcy. You will need to have all of your financial information ready, such as income, debts, and expenses. Be sure to have proof of each of your claims, not just numbers on paper. Have copies of pay stubs and bills handy.
The counseling agency will analyze all of your information and may design a repayment plan for you. However, you are only obligated to attend the course – you do not have to follow any repayment plan the agency designs based on your finances.
Debtor Education Requirement
You will have to complete a debtor education course before your bankruptcy will be discharged. It must be completed within two months of your 341 hearing and you will have to provide your certificate to the court to prove you have completed the course.
The debtor education course focuses on your financial life after your bankruptcy has been completed. It is designed to help you make better financial choices such as managing money, creating and following a budget, and how to use credit wisely. Hopefully, after taking this course, you will be able to needing to file for bankruptcy again.
Remember that you must choose an approved debtor education course. If you do not complete the course, the court will close your bankruptcy case and you will have to file again. Filing again means more fees you will have to pay, so the best choice is to take the course and send a copy of your certificate to the court.
Both of these requirements are designed to help you to make a new start in making good financial choices in your life. They are not the court’s way of forcing you to do something you are not interested in, but in trying to help you focus on managing your finances in a better way. Your bankruptcy attorney can help you find approved courses in your area.