With few exceptions, all debtors are required to receive credit counseling from an approved agency before they can file for their bankruptcy. Further, debtors cannot receive a discharge unless they also complete a debtor education course (also known as a financial management course) after filing their case. Let’s examine this requirement a little more closely.
After filing for Chapter 7 or Chapter 13 bankruptcy, you are required to complete a debtor education course before you can receive your discharge. If you filed a joint petition, both you and your spouse must complete the debtor education course. You must understand that the debtor education requirement is separate from the credit counseling requirement in bankruptcy. You will also have to complete a credit counseling course. In a nutshell, you will need to complete a credit counseling course before you can file your bankruptcy and complete a debtor education course before you can receive a discharge.
This course has a specific time completion. If you don’t complete the debtor education course within the required deadlines, the court will close your case and you won’t get a discharge. This means you remain liable for your debts.
The Purpose of Debtor Education
The purpose of debtor education is to help one focus on life after bankruptcy. The course teaches you how to manage your money, use credit wisely, and make the most of your bankruptcy discharge. You will be educated on how to make sound financial decisions to avoid bankruptcy in the future.
When to Complete Your Debtor Education Course
The debtor education course must be completed after your case is filed.
If you filed for Chapter 7 bankruptcy, you must complete the course within 60 days of the initial date set for your meeting of creditors, also known as the 341 hearing.
In Chapter 13 bankruptcy, it must be completed before you make your last plan payment.
Like the credit counseling course, you must use an approved agency and file your certificate of completion with the court. Should you fail to complete the debtor education requirement, know that the court can close your case without a discharge.
If you miss these deadlines, you can reopen your case, for a fee, in order to complete the class and file your certification of completion.
What to Expect from Debtor Education
The debtor education course covers money management skills. The focus of the course will be primarily in educating you about how to budget, manage your money, and use credit wisely after you receive a discharge in bankruptcy. Expect to develop a budget using your projected income and expenses after bankruptcy.
The debtor education class typically lasts about two hours, and provides information on such topics as:
- Setting and reaching financial goals
- Saving money
- Money management
- How to prepare a budget
- Consumer protection
- How to cut expenses
- How to use credit wisely and effectively
- How to deal with an unexpected financial crisis.
When you are in financial distress, it’s always a good idea to talk to a bankruptcy lawyer about your situation. It doesn’t mean you’ve committed to do a bankruptcy but rather to finding out your options. If you live in the North Atlanta area, the experienced bankruptcy attorneys at Charlton & Glover can help you make the best decision that provides the most benefits for your unique situation. Call us at (770) 993-1005 to schedule your free initial consultation.