What Is the Difference Between Credit Counseling and Debtor Education? Part Two: Debtor Education

After you file for Chapter 7 or Chapter 13 bankruptcy, you are required by federal law to fulfill debtor education requirements before your debt can be discharged. The debtor education course goes hand-in-hand with credit counseling.

Read on to understand the difference between these two requirements, and to understand what steps you need to take in order to satisfy them.

While credit counseling looks at the present state of your finances, debtor education focuses on your life after bankruptcy. You’ll learn how to create a budget to manage your money, make good use of credit, and ultimately make financial decisions that will keep you from falling back into bankruptcy in the future.

If you filed for Chapter 7 bankruptcy, you must complete a debtor education course within 60 days of the date set for your meeting of creditors, also called the 341 hearing. If you’ve filed for Chapter 13 bankruptcy, the debtor education course must be completed before you make the last payment on your plan.

Like credit counseling, the debtor education course can be completed over the phone, online, or in person. This course is likely to last longer than the pre-filing session; typically it will take about two hours to cover the pertinent material. Once you have successfully finished the course, you will receive a certificate of completion. This certificate must then be filed with the court. If you fail to complete your course, or fail to file your certificate, your case is likely to be closed without your debt being discharged, and it will cost you more money to reopen the case and file the certificate.

The debtor education provider you choose must be certified with and approved by the United States Trustee Program, a facet of the Department of Justice. The US Trustee Program provides a comprehensive list of approved providers on their website, in addition to Frequently Asked Questions about the program.

For more information about how bankruptcy protection can put you on a road to better financial health, or about how having an experienced bankruptcy lawyer like Joel R. Spivack on your side can truly simplify a complex process, contact him today for a free consultation.