Filing for bankruptcy relief is a huge decision. While filing a Chapter 7 or Chapter 13 bankruptcy case can help you get out of debt, there are also some requirements and consequences that you should be aware of before filing a bankruptcy petition. Our Jacksonville bankruptcy attorney discusses one of the bankruptcy requirements in this article — the required bankruptcy courses. To learn more, call 904-248-4482 for a free consultation with an experienced bankruptcy lawyer in Jacksonville.
In this article, the topics we discuss include:
- What is a Bankruptcy Credit Counseling Course?
- What is a Bankruptcy Debtor Education Course?
- How Do I Take the Bankruptcy Courses and How Expensive are Bankruptcy Courses?
What is a Bankruptcy Credit Counseling Course?
The credit counseling course is the first of the two required bankruptcy courses debtors must complete to obtain a bankruptcy discharge. It is often referred to as the first bankruptcy course or the pre-bankruptcy filing course.
When Congress made changes to the Bankruptcy Code in 2005, it added the requirement for debtors to complete a credit counseling course before filing a bankruptcy petition. The credit counseling course is designed to help an individual determine if filing bankruptcy is the best option for debt relief. The course discusses bankruptcy and other debt relief options.
The credit counseling course also analyzes your income and debt to determine if you have sufficient income to pay your debts through an informal repayment plan. You enter information regarding your income and living expenses, and the program creates a monthly budget. If your income is negative, it is obvious that you probably need to file a bankruptcy case.
However, the credit counseling agency may propose an informal repayment plan. Even though you are required to take the credit counseling course to file a Chapter 7 or Chapter 13 case, you are not required to accept the repayment plan proposed by the agency. You are required to file the proposed plan with your bankruptcy documents if the credit counseling agency recommends a specific debt repayment plan.
What is a Bankruptcy Debtor Education Course?
The debtor education course must be completed after your bankruptcy case is filed. It is often referred to as the second course or post-bankruptcy filing course. Before you can obtain a bankruptcy discharge, you must complete the debtor education course.
Our Jacksonville bankruptcy attorney recommends completing the second bankruptcy course before you attend your bankruptcy hearing to ensure this vital step in the bankruptcy process is complete. Failing to file a certificate of completion for the debtor education course results in a denial of discharge. In other words, you continue to owe all your debts as if you had never filed a Chapter 7 or Chapter 13 case.
The information you learn in the debtor education course can help you maintain control over your finances. The course is designed to educate you in various financial matters that are important for achieving strong financial well-being. Some of the topics discussed in the debtor education course include:
- Preparing a budget
- Wise money management skills
- How to deal with a financial crisis
- Managing credit effectively and wisely
- Consumer protection laws
- Establishing financial goals
- Reducing expenses and saving money
- Financial record keeping
- Alternatives to using credit
Throughout the course and/or at the end of the course you are required to answer questions to ensure you understand the information provided during the course. It is not possible to fail the debtor education course. The course is designed to prepare you for managing your finances after bankruptcy. Therefore, you can go back through certain sections and answer the questions again to complete the course.
How Do I Take the Bankruptcy Courses and How Expensive are Bankruptcy Courses?
Both bankruptcy courses are offered online, by telephone, and in person through several companies or agencies. The U.S. Trustee's Office must approve each company offering the bankruptcy courses. Approval by the UST ensures that the material used for each course meets the minimum standards set by the government for the pre-bankruptcy course and post-bankruptcy course. A complete list of the approved companies that offer one or both courses can be viewed online at the UST website. Our Jacksonville bankruptcy attorney can also give you a list of the approved agencies that offer one or both bankruptcy courses.
Both online versions of the courses can be completed in roughly two hours. Spouses who file a joint bankruptcy petition can complete the course together or at different times. The fees charged for the bankruptcy courses are relatively low. Some companies offer both courses for as little as $10 to $15 per course. Since the companies are approved by the UST so that they offer the same basic information, you can choose the company with the lowest rates.
For debtors with extremely limited income and resources, the company may waive the fee. Also, in limited circumstances, the requirement to complete the course may be waived by the court. You can discuss this option with a qualified Jacksonville bankruptcy attorney.
Contact Our Law Firm for a Free Consultation With a Jacksonville Bankruptcy Lawyer
If you have questions about filing bankruptcy, we encourage you to meet with one of our Jacksonville bankruptcy attorneys to discuss your financial situation. For your free consultation, call The Law Offices of Justin McMurray, P.A. at 904-248-4482.