Anyone who files for Chapter 7 or Chapter 13 bankruptcy must complete two courses – a credit counseling class before the case is filed and a debtor education class after the case is filed. Without a certificate of completion for the first a bankruptcy case can’t even be filed. Without a certificate of completion for the second the case won’t end with a discharge and freedom from debt.
The courses share a similar focus, as they both relate to personal financial management. But because their purposes differ, credit counseling and debtor education classes can’t be completed at the same time. Here’s what you need to know about meeting these bankruptcy requirements.
The purpose of taking a credit counseling course is to examine your financial situation, review your debt management options and explore alternatives to filing for bankruptcy. The class is mandatory, and it must be completed within the six-month period before you file a bankruptcy case.
The bankruptcy credit counselor in some cases may propose a plan to help you work out your debt. You are not required to follow their plan, its for information purposes. You are required to file a copy of the plan with your bankruptcy paperwork, but your actual bankruptcy plan can be different from their proposal.
Debtor education, formally called a personal financial management course, is designed to address financial management after bankruptcy. The goal is to help you learn how to avoid debt problems in the future. Completion of the class is one of the final steps in the bankruptcy process.
If you file for Chapter 7, the mandatory bankruptcy course needs to be completed within 60 days of the initial date set for the meeting of creditors. With a Chapter 13 case, the deadline for completion of a debtor education class is the date of the last plan payment or before filing a motion for discharge.
You can complete credit counseling and debtor education classes online. Courses are also offered over the phone. In some areas you can make arrangements to take them in person.
To meet the bankruptcy requirements, the courses must be from a court-approved consumer financial management agency. A list of providers is available on the U.S. Trustee Program website (http://www.usdoj.gov/ust/). The cost of taking the classes is minimal, and you can shop around for the best price. If you don’t have room in your budget, don’t be worried – agencies are required to provide reduced rates and fee waivers for low-income debtors.
Have questions? If you live in northern Utah, reach out to the Law Office of Davis & Jones for expert answers. We’ve been helping Utah residents who are overburdened with debt since 1995, and our bankruptcy lawyers can guide you in getting the fresh financial start you need and deserve.
For more information on credit counseling, debtor education or any of the other legal requirements in Chapter 7 or Chapter 13, contact our Salt Lake City office and schedule a Utah bankruptcy attorney consultation today.