Credit Counseling and Debtor Education Course
You’ve decided that declaring bankruptcy is right for you, and you know there are some initial steps you need to take. You see both credit counseling and debtor education on the list, but they sound like the same thing! Do you need both? Or just one? And when do you need them?
You do need to complete both courses, and timing is important. It’s easy get confused as to what they are and what they are for, so we’ve put together an explanation and resources for each!
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Completing a credit counseling course within 180 days prior to filing is a requirement for starting the process of declaring bankruptcy. When you successfully complete this short class, you’ll receive a certificate to include with your filing. If you don’t have this certificate, the court will dismiss your case. This is because declaring bankruptcy is a serious decision, and the court wants to make sure you have no other option besides bankruptcy to solve your financial crisis.
There are very few exceptions to this requirement, but you can receive a 30-day extension after filing to complete the counseling if your bankruptcy is considered an emergency. Generally, this only applies to a bankruptcy filed to stop a foreclosure or wage garnishment.
The course can be taken in person, over the phone or online, and the focus will be on your income, expenses and debt to help you determine the best course of action. Most often the credit counseling agency will examine your budget and make suggestions as to your other options, such as a repayment plan if feasible.
Don’t worry, you’re under no obligation to take these recommendations, and only attendance and completion of the course is required for certification. A list of approved credit counseling agencies can be found here. Although there are no standard guidelines, approved credit counseling agencies must make their services available to those who cannot afford to pay.
OTHER TYPES OF BANKRUPTCY
Chapter 13 Bankruptcy
For High Income and Asset Owners
Chapter 11 Bankruptcy
For Businesses and Corporations
For Struggling Homeowners