The Predischarge Debtor Education Requirement in Bankruptcy

You must take a debtor education course after you file bankruptcy but before you get a discharge in your Chapter 7 or Chapter 13 bankruptcy.

In both Chapter 7 and Chapter 13 bankruptcy, you (and your spouse if you file jointly) must take a personal financial management course from an agency approved by the court after you file your bankruptcy petition. This course is known by several names, including the debtor education course and post-filing course.

Read on to learn about the financial management course requirement.

Pre-Bankruptcy Credit Counseling v. Post-Filing Debtor Education Course

Before you file for bankruptcy, you must take a credit counseling course that helps you explore alternatives to bankruptcy. If, after taking the course, filing for bankruptcy makes sense for you, you’ll include the certificate of completion with your filing paperwork. (To learn about that requirement, see The Pre-Bankruptcy Credit Counseling Requirement.)

The debtor education course requirement is different. It’s a financial management course that you take after you’ve filed for bankruptcy but before you get a discharge. The debtor education course teaches you strategies that will help you stay financially healthy after your bankruptcy.

Approved Agencies and Financial Management Courses

You must take the court from an agency approved by the Office of the U.S. Trustee. Approved courses must last a minimum of two hours and cover certain required curriculum.

Unlike the agencies approved to provide pre-bankruptcy credit counseling, the agencies providing debtor education courses don’t have to be a nonprofit organization. However, the agencies must allow you to pay a sliding scale fee if you can’t afford to pay the full price. You can take the course in person, online, or through the mail.

You can find approved agencies in your area by visiting the U.S. Trustee’s website at www.justice.gov/ust. Click on “Credit Counseling & Debtor Education” in the left column.

Filing the Certificate

After you take the course, you must file Official Form 423 Certification About a Financial Management Course. On it, you’ll certify that you have taken the course. You must also file a certificate of completion from the debtor education agency.

When You Must Get the Counseling

In Chapter 7 bankruptcy, you must file Form 423 and the certificate no later than 45 days after the date on which your meeting of creditors was first scheduled. Don’t miss the deadline. If you do, the court might close your case. If that happens, you’ll have to reopen your case and repay the entire filing fee.

In Chapter 13 bankruptcy, you must file Form 423 and the certificate no later than the date on which you make your last plan payment. You can take the course early on in your case, however, and some attorneys recommend this because the course provides information that may help you budget and successfully complete your plan.

To learn about other requirements and procedures in bankruptcy, see our Bankruptcy Filing & Procedures area.

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