Credit Counseling and Debtor Education: Bankruptcy Course Requirements

If you are getting ready to file for bankruptcy, there are two mandatory courses you need to complete. The first one happens before you file. The second happens after you file but before you receive your discharge. Missing either one can delay or derail your case, so it is worth understanding what they involve and how to get them done.

These courses were added to the bankruptcy process by the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. Congress wanted to make sure that everyone filing for bankruptcy had received some basic financial education. In practice, the courses are straightforward and not difficult to complete. Here is what you need to know.

Course One: Pre-Filing Credit Counseling

Before you can file your Chapter 7 or Chapter 13 bankruptcy petition, you must complete a credit counseling session with an agency approved by the United States Trustee's office. This session must occur within 180 days before your filing date.

The counseling session covers your financial situation, your budget, and your options for dealing with your debt. The counselor will review your income, expenses, and debts with you and discuss whether bankruptcy is the right choice or whether other alternatives might work. The session typically takes between 60 and 90 minutes.

Most people complete this requirement online or by phone. There are several approved agencies that offer sessions at any time of day, which makes scheduling easy. The cost is usually between $15 and $50, though fee waivers are available if you cannot afford it.

At the end of the session, the agency issues a certificate of completion. This certificate must be filed with the court along with your bankruptcy petition. Without it, your case will not be accepted. We provide our clients with a list of approved agencies and help make sure the timing works with the rest of the filing process.

Course Two: Pre-Discharge Debtor Education

The second required course is called the debtor education or financial management course. You complete this one after your bankruptcy case has been filed but before you receive your discharge. In a Chapter 7 case, the discharge typically comes about three to four months after filing, so you have a window of time to get it done. In a Chapter 13 case, the discharge comes at the end of your three-to-five-year plan, but most people complete the course well before that.

The debtor education course focuses on practical financial skills: budgeting, money management, using credit wisely, and building financial stability going forward. It is usually about two hours long and can be completed online, by phone, or in person.

The cost is similar to the first course, generally $15 to $50, and fee waivers are available. You receive a certificate of completion that must be filed with the court. If you do not file this certificate, you will not receive your discharge, which means your debts will not be eliminated. This is not something you want to forget about.

Choosing an Approved Provider

Not just any financial counseling service counts. The course must be provided by an agency that has been approved by the U.S. Trustee for the district where your case is filed. The Department of Justice maintains a list of approved agencies on its website, and you can search by state.

For our clients in the Western District of Pennsylvania, there are multiple approved providers available. Many of them operate nationally and offer online courses that you can complete from home. We recommend providers that our clients have had good experiences with and that offer reasonable pricing.

A few things to watch out for when choosing a provider: make sure they are actually on the approved list, check the cost before you start, and verify that they will issue a certificate that meets the court's requirements. Some agencies try to upsell additional services that you do not need. The required course is all you need to complete.

What Happens If You Do Not Complete the Courses

Skipping or forgetting about these courses creates real problems. If you do not complete the pre-filing credit counseling, the court will not accept your bankruptcy petition. Your case simply cannot begin.

If you do not complete the debtor education course after filing, the court will close your case without issuing a discharge. That means you went through the entire bankruptcy process, including the means test, the meeting of creditors, and months of waiting, and your debts are not eliminated. You would need to reopen the case and file the certificate, which adds time, stress, and potentially additional costs.

In our office, we track these requirements and send reminders to make sure nothing falls through the cracks. It is a simple step, but it is a mandatory one.

What the Courses Are Not

People sometimes worry that the counseling session is going to be a judgment on their financial decisions or an attempt to talk them out of filing bankruptcy. It is not. The counselors are required to present your options, which may include debt management plans and other alternatives, but they are not there to pressure you into anything.

The credit counseling session is a legal requirement, not a therapy session. You will go through a standardized review of your finances, hear about your options, and receive your certificate. If you have already decided that bankruptcy is the right choice, the counseling session is not going to change that. It is a box that needs to be checked.

The debtor education course is a bit more substantive in terms of content. It covers topics that can genuinely help you manage your finances after bankruptcy, including how to create a workable budget and how to start rebuilding credit. Some clients find it more useful than they expected, even if it is not the most exciting way to spend two hours.

Getting It Done Efficiently

Both courses are designed to be as easy as possible to complete. Online providers offer 24/7 availability, so you can do them on your own schedule. Phone-based options are available if you prefer. In-person sessions exist but are less common and usually less convenient.

If you are working with our office, we will tell you exactly when to complete each course and which providers to use. The pre-filing course needs to be done before we file your petition, ideally a few days before so we have the certificate in hand. The post-filing course should be completed within the first couple of months after filing so there is no risk of missing the deadline.

These courses are a small part of the overall bankruptcy process, but they are a required part. If you have questions about them or about any other aspect of filing, reach out to our office and we will walk you through it.