Bankruptcy Education Courses: What They Are and How to Complete Them

If you are filing for bankruptcy, there are two educational courses you must complete as part of the process. These are not optional. Congress made them mandatory in 2005, and your case will not move forward without them. The good news is that both courses are relatively quick, inexpensive, and can be done from your couch.

A lot of clients come into our office confused about these requirements, mixing up which course comes first or assuming they only need one. Here is a clear breakdown of both courses, when you need to take them, and what to expect.

Course 1: Pre-Filing Credit Counseling

Before your bankruptcy petition can be filed with the court, you must complete a credit counseling course from an agency approved by the U.S. Department of Justice. This requirement applies to every individual filing for bankruptcy, whether it is Chapter 7 or Chapter 13.

What It Covers

The credit counseling session is essentially a review of your financial situation. A counselor will go over your income, expenses, debts, and assets. They will discuss whether there are alternatives to bankruptcy that might work for you, such as a debt management plan. At the end, you receive a certificate of completion that we file with your bankruptcy petition.

I will be straightforward about this: for most people who have reached the point of calling a bankruptcy attorney, the alternatives discussed in the counseling session are not going to be viable. But the law requires the session regardless, and it does not take long to get through.

Timing

The credit counseling certificate must be dated within 180 days before your bankruptcy filing. In practice, most people complete it within a few days or weeks of filing. We usually recommend doing it once we have decided together that bankruptcy is the right path and we are getting close to a filing date.

In emergency situations, such as when a foreclosure sale or wage garnishment is imminent, the course can be completed the same day as filing. Some providers even have sessions available in the evening and on weekends.

How to Take It

The course can be completed online, by phone, or in person. Most of our clients do it online because it is the most convenient. The session typically takes 60 to 90 minutes. You will need information about your income, expenses, and debts, so have that handy before you start.

Cost

Most approved agencies charge between $15 and $50 for the session. If you truly cannot afford it, many agencies will waive the fee. The provider will ask about your financial situation and determine whether a fee waiver applies.

Course 2: Post-Filing Debtor Education

The second course, called the debtor education course or financial management course, is taken after your case has been filed. This is a separate course from a separate category of approved providers. You cannot use the same course for both requirements.

What It Covers

The debtor education course focuses on financial management skills for life after bankruptcy. Topics typically include budgeting, managing money, using credit wisely, and planning for financial goals. The content is more forward-looking than the pre-filing course, which focuses mainly on your current situation.

Honestly, some of this material is basic enough that it may feel unnecessary. But some clients have told me they picked up a useful tip or two, particularly around budgeting strategies. At a minimum, it is a short requirement that gets you one step closer to your discharge.

Timing

In a Chapter 7 case, you need to complete the debtor education course after filing but before your discharge is entered, which is typically about 60 to 90 days after filing. The deadline is tied to your discharge, so do not put it off. If you miss the deadline, your discharge can be delayed or even denied until the certificate is filed.

In a Chapter 13 case, you need to complete it before the end of your three-to-five-year plan. Most clients complete it early in the case just to get it out of the way. We recommend doing it within the first few months after filing so it does not fall through the cracks over a multi-year plan.

How to Take It

Like the credit counseling course, the debtor education course can be completed online, by phone, or in person. Online is by far the most popular option. The course usually takes about two hours.

Cost

Expect to pay between $15 and $50. Fee waivers are available from some providers for people who cannot afford the cost.

Approved Providers

Not just any credit counselor or financial educator qualifies. Both courses must be completed through agencies approved by the U.S. Trustee Program, which is part of the Department of Justice. You can find a list of approved agencies for both courses on the U.S. Trustee's website.

We provide our clients with a list of recommended providers that we know are reliable and reasonably priced. If you are working with our office, we will make sure you have everything you need to get both courses done on time.

What If Both Spouses Are Filing?

If you and your spouse are filing a joint bankruptcy case, you each need to complete both courses. Some providers offer a discounted rate for couples completing the course together, so it is worth asking about that when you sign up.

What Happens If You Do Not Complete Them

If you do not complete the pre-filing credit counseling, your case cannot be filed. If you do not complete the post-filing debtor education, your discharge will not be granted. It is that simple. The court will not make exceptions.

We track these deadlines for every client and follow up to make sure both certificates are filed with the court on time. It is a small part of the overall process, but an important one.

Getting Started

The education courses are just one piece of the bankruptcy process. If you are thinking about filing and want to understand the full picture, including whether you qualify and what to expect, start with our Bankruptcy 101 page or call 412-923-4941 to schedule a free consultation. We walk every client through the entire process, including these courses, so nothing catches you off guard.