The U.S. Bankruptcy Code mandates a bankruptcy debtor education course for everyone who wishes to file for Chapter 7 or Chapter 13.
In other words, before you can receive a discharge of your case, you must complete a financial management education course.
Is Debtor Education the Same as Bankruptcy Credit Counseling?
Not at all. These are two separate legal requirements for all bankruptcy filers. Credit counseling must be completed before you file, and your certificate of completion for the course must be included with the bankruptcy petition filed with the courts.
Debtor education, on the other hand, is completed after you file your petition. You must complete the course by a certain deadline. If you don’t, the courts will dismiss your case and you will still be liable for all of your debts.
What’s the deadline to take this course?
For Chapter 7 filers, the certificate of completion must be filed with the courts no later than 45 days following the date of your initial meeting of creditors. If you’re filing for Chapter 13, your certificate must be filed by the date of your last plan payment.
Where Do You Take a Bankruptcy Debtor Education Course?
Pre-discharge counseling courses can be taken in person, online or through the mail, and you are free to choose whichever method you prefer.
It is important to ensure that the agency providing your course is approved by the Office of the U.S. Trustee. You can check with your bankruptcy attorney or visit the U.S. Trustee’s website to find an approved financial management education provider.
Debtor education providers, unlike the pre-bankruptcy credit counseling agencies, are not always nonprofits. Fees for the course are usually $50 or less, though some agencies may charge more because they deliver additional instructional benefits.
If you can’t afford to pay the full course fee, you may request a fee waiver or reduction. Course providers are required to offer an income-based sliding scale for their fees.
What Can You Expect from Bankruptcy Debtor Education?
The overall goal of pre-discharge counseling is to teach you to make sound financial decisions in the future. The course is intended to help you manage your money so you can avoid having to file for bankruptcy again.
Courses generally last about two hours and cover topics including how to save money and prepare a budget, ways to cut expenses and understanding consumer protection laws. You’ll also learn how to rebuild your credit score by using credit wisely and how to deal with a sudden financial crisis.
If you have questions about the legal requirements for filing Chapter 7 or Chapter 13 in Utah, the experienced attorneys at Lewis Adams & Associates have answers. We are located in West Jordan, Utah, but we serve clients throughout northern Utah. Contact us today to schedule a complimentary consultation, and to learn more about bankruptcy debtor education.