The Pre-Discharge Debtor Education Requirement in Bankruptcy

In both Chapter 7 and Chapter 13 bankruptcy, you (and your spouse if you file jointly) must take two courses before you receive a bankruptcy discharge, the order that wipes out qualifying debt. You must take one before you file your paperwork and another afterward.

Read on to learn about the second class, a personal financial management course known by several names, including the debtor education course, the "second" course, and the post-filing course.

The Mandatory Bankruptcy Courses

Before you file for bankruptcy, most people must take a credit counseling course that helps you explore alternatives to bankruptcy. If filing for bankruptcy still makes sense to you after completing the course, you'll include the certificate of completion with your filing paperwork. For more information, see The Pre-Bankruptcy Credit Counseling Requirement.

The debtor education course is different. It's a financial management course you take after you've filed for bankruptcy but before you get discharged. The debtor education course teaches you strategies to help you stay financially healthy after bankruptcy.

Finding Approved Providers

You'll take the course from an agency approved by the Office of the U.S. Trustee. Unlike the agencies approved to provide pre-bankruptcy credit counseling, those providing debtor education courses don't have to be nonprofit organizations. However, you must be allowed to pay on a sliding scale if you can't afford to pay the full price. You can take the course in various ways, depending on the provider.

You can find approved agencies in your area by visiting the U.S. Trustee's website. Select "Credit Counseling & Debtor Education" in the left navbar.

Course Certificate Forms to File

After you take the course, you'll 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. In some cases, the agency will file the certificate for you.

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 must reopen your case and repay the 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. However, you can take the course early on in your case, and some attorneys recommend this because the course provides information that may help you budget and complete your plan.

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.