When you file for bankruptcy, you are required to go through counseling and debtor education courses. Counseling and debtor education are two different requirements that must be completed at different points in the bankruptcy case. Understanding both of them is important for anyone who is considering bankruptcy as a way to regain control of their finances.
What is pre-bankruptcy counseling?
Pre-bankruptcy counseling is a 60- to 90-minute session that you can have with a counselor over the phone, in person or online. It must take place before you file for bankruptcy. The session must take place with an approved credit counseling organization. In this session, you go over your financial situation, create a budget and discuss the alternatives to bankruptcy. You will get a certificate as proof of the completed session. You need the certificate to file with your petition for bankruptcy.
What is post-filing debtor education?
Post-filing debtor education is another mandatory course that you must take as part of the bankruptcy process; however, this one has to be taken after you have already filed for bankruptcy. Generally, this course lasts around two hours. You will learn about using credit wisely, managing your money and creating a budget. As is the case with the pre-bankruptcy counseling, this can only be done with an approved organization. You have to submit the certificate you receive after completing the program to the bankruptcy court prior to your bankruptcy being discharged.
When you are ready to file for bankruptcy, it is important that you know exactly what is expected of you so that you can ensure you do what is necessary for your case. When exploring the options for these two programs, make sure you only use approved organizations.
Source: Federal Trade Commission, "Filing for Bankruptcy: What to Know," accessed April. 14, 2015