When you file for bankruptcy you will be required to participate in credit counseling just prior to filing, and you will also need to participate in debtor education after you file. Both programs help you learn how to manage your finances and credit better in the future. A debtor education certificate is not necessary prior to filing, but it will be necessary to complete the bankruptcy process.
Debtor education programs are approximately two hours long and can be completed in a single sitting, if you choose. You are responsible for paying for the program.
The certificate you receive after completing debtor education allows you to be discharged from your bankruptcy. The only way to complete your case is to submit the certification of completion. Those filing for Chapter 7 bankruptcy must complete the course within 60 days of the initial date set for the meeting of creditors. Those filing Chapter 13 have until they complete their last payment in their bankruptcy plan, which can be as long as five years after the initial filing date.
How Debtor Education Helps You in the Future
In addition to being a condition of release, debtor education also helps you achieve a better financial position after you file for bankruptcy. It provides you with strategies for better managing your money and teaches you how to handle your credit wisely. It also provides tips for creating a budget and saving money, and reviews consumer protection laws, so you do not become a victim of lending scams in the future. The ultimate goal of debtor education is to help you live a better financial life and reduce the odds you will need to file for bankruptcy again in the future.
Everyone who files for bankruptcy is required to participate in debtor education. However, those who have certain disabilities that prevent them from participating or those who are on active duty and located in a combat zone might be exempted.
Debtor Education is a Tool, Not a Punishment
Debtor education is not intended to punish you, nor is something you should feel anxious about. It’s a great opportunity to learn and to apply what you learn to build a better financial future. There’s nothing wrong with making financial mistakes, but if you can avoid those mistakes in the future, you will find you have far more opportunities and life is far less stressful.