For individual bankruptcy debtors, there are two separate courses that you must take – one before you file the bankruptcy petition and one after the filing.
- Pre-Bankruptcy Credit Counseling
The pre-filing credit counseling course is designed to help you determine if you truly need bankruptcy, or whether a budget that enables you to repay the debt is the best solution. The pre-filing course requirement was enacted to ensure consumers have exhausted options for dealing with their debt problems outside of bankruptcy. It typically involves reviewing your finances, preparing a budget, and exploring any suitable alternatives to bankruptcy. In most cases, bankruptcy turns out to be the only feasible option.
The credit counseling session usually lasts no more than one hour and is typically completed online or by phone. It’s important to use an approved credit counseling agency, and you can find a list of approved agencies on the Department of Justice website: https://www.justice.gov/ust/list-credit-counseling-agencies-approved-pursuant-11-usc-111. The cost of the session varies and can be as low as $14.95.
Upon completing the pre-filing course, you will be provided with a certificate that needs to be filed with the Bankruptcy Court in conjunction with the bankruptcy petition, schedules, and statements. The course must be completed within 180 days before the bankruptcy filing, so the certificate will expire if you wait more than six months after taking it to file bankruptcy and you’ll have to retake the course prior to filing.
- Post-Filing Debtor Education
The course you are required to take after the bankruptcy filing, known as the Personal Financial Management Course, is intended to help you avoid having to file bankruptcy again in the future. Topics covered by the second course include developing a budget to manage your money, using credit responsibly, and rebuilding your credit after bankruptcy.
It is important to wait until after you have filed the bankruptcy and received a case number to take the post-filing course. The deadline for taking it and filing a certificate of completion in a Chapter 7 bankruptcy is 60 days following the first date set for your 341 Meeting of Creditors. In a Chapter 13 bankruptcy, the certificate must be filed before your last plan payment is made.
The post-filing course is a bit longer than the pre-filing course, but no more than two hours in duration. Approved providers of personal financial management instructional courses are also listed on the Department of Justice website: https://www.justice.gov/ust/list-approved-providers-personal-financial-management-instructional-courses-debtor-education. As with the pre-filing course, most debtors take the post-filing course online or by phone. You should be able to take both courses with the same agency, often with a discount on the second course when taken through the same agency.
If you’re thinking about filing bankruptcy on your own, please consider meeting with an experienced bankruptcy attorney in our Phoenix or Mesa office for a free no-obligation consultation. We offer very low fees and want to help you through this complicated process.