In order to have your bankruptcy filing approved by the court, pre- and post-filing classes are a requirement.
Bankruptcy education is a part of the Bankruptcy Abuse and Consumer Protection Act, a law signed by President George W. Bush in 2005. The law was intended to prevent abuse of the bankruptcy system. It did so by tightening Chapter 7 bankruptcy eligibility requirements and made it mandatory for those filing to attend bankruptcy education courses, before and after filing.
Pre-bankruptcy counseling must be completed within 180 days of filing. The course provides financial counseling from an approved agency and usually lasts about 90 minutes. It includes information on budgeting and bankruptcy alternatives, with the goal of helping people determine if bankruptcy truly is their best option. For bankruptcy approval, filers must provide proof of their pre-bankruptcy counseling attendance.
Those who file for bankruptcy are also required to attend post-filing debtor education before their debts are officially discharged. Courses typically last about two hours and cover budgeting, using credit wisely, and improving money management skills. The goal of this course is to help filers avoid the need to file for bankruptcy more than once. A certificate of completion of post-bankruptcy education is also required for bankruptcy approval.
Though it might seem as if attending bankruptcy education courses is inconvenient or unnecessary, these courses are designed to help those filing. Courses can be taken online, and in some cases over the phone, and take no more than a few hours. Many people who attend these courses report they feel better after completion, and in some cases, attendees realize bankruptcy really isn’t their best option. Others feel more prepared to deal with their bankruptcy and better manage their finances in the future.
If you are considering bankruptcy and you have questions about bankruptcy education, we can help. Keep in mind, in order for your bankruptcy to be approved, you must attend an approved program. To review approved programs in your area, visit the Justice Department’s state by state list.We’d also be happy to help you find a qualified program and move forward with your bankruptcy.