Credit Counseling & Debtor Education Requirements
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) changed some of the requirements for Americans interested in filing bankruptcy to relieve their financial struggles.
Two significant changes were the pre-filing and pre-discharge requirements: the credit counseling briefing and the debtor education course.
Before Filing Bankruptcy: The Credit Counseling Briefing
If you want the court to accept your bankruptcy petition and enter the automatic stay to stop creditors from contacting you, completing the credit counseling briefing is imperative.
Judges are typically not obligated to accept any bankruptcy petition that is entered without the certificate of completion from a credit counseling briefing.
A bankruptcy lawyer will need to file this certificate with your initial bankruptcy petition.
Bankruptcy Alternatives
The credit counseling requirement is designed to make sure you're aware of other nonbankruptcy-related options that could possibly help you get out of debt.
Basically, you're required to complete the briefing so that the government has a way of making sure that bankruptcy protection is only offered to those truly in need of it.
What to Expect from the Credit Counseling Briefing
Luckily, you don't have to go too far out of your way to complete the briefing.
In fact, you can complete the briefing from anywhere you have Internet access.
StartFreshToday.com offers online credit counseling briefings for only $30. (Note: Prices may have changed since this posting.)
The briefing contains useful information about credit and debt, allows you to navigate at your own pace and can be conveniently stopped any time you need a break.
Plus, because of the online access, you'll be offered a summary of the briefing that you can print and you'll have your results posted electronically.
Will I Still Be Able to File for Bankruptcy?
Although the credit counseling requirement is designed to deter unnecessary bankruptcy filings, early results from post-BAPCPA counseling agencies showed that fewer than 4% of people who received counseling were advised to pursue an alternative to bankruptcy.
Before Receiving Your Bankruptcy Discharge: Financial Management
The debtor education course (also known as the financial management course) must be completed before you can receive your discharge from bankruptcy.
Those who file under Chapter 7 will have a shorter window of opportunity to complete this course than those who file under Chapter 13 because Chapter 7 cases move much more quickly than Chapter 13 cases.
Completing the course as soon as possible, however, may be in your best interest no matter what chapter you file under, since the information provided can help you better manage money.
Making the Most of Bankruptcy
One of the wonderful benefits of bankruptcy is that it offers filers a "fresh financial start" by the time they receive their discharge.
But, as you'll learn, that's only the beginning. Keeping your finances in order is a challenge – and it's one you'll likely be better prepared for after completing the financial management course.
The course instructs you on how to avoid common mistakes that can lead to debt after bankruptcy, helps you develop skills for managing money, offers tips for devising and sticking to a budget and more.
Finding a Financial Management Course
Like the credit counseling briefing, you can purchase and complete your debtor education course on the Internet.
Check out Start Fresh Today's online financial management course.
Alternatives to Working on the Internet
If you'd prefer to complete your credit counseling briefing and debtor education course in an offline format, Start Fresh Today also offers a telephonic option – you can still take care of your BAPCPA-mandated requirements from the comfort of your home, but you don't have to use a computer.
Still Have Questions? Talk to a Bankruptcy Lawyer
If you're still unsure when or how to complete your pre- and post-bankruptcy requirements, or if you're ready to get your bankruptcy case started, you may want to talk with a bankruptcy lawyer practicing in your area.
To do that, all you need to do is fill out our free online case evaluation form or call us toll-free at 866-288-7281. Our call center can connect you with a sponsoring bankruptcy lawyer near you.