Debtor Education Course: When to Take It and What to Expect

You need two courses to complete bankruptcy and discharge your debts. The second course is the personal financial management course. People also call it the debtor education course.

You must complete the course within 60 days of your 341 meeting. After finishing, you file the certificate of completion with the court. The course teaches budgeting skills and helps you avoid financial problems after bankruptcy.

What Is the Debtor Education Course?

When you file Chapter 7 bankruptcy, you complete two required educational courses. One happens before filing. The other happens after.

The first course covers credit counseling and debt relief options.

The second course focuses on financial management. Course providers also call it debtor education. It covers budgeting and money management topics.

All bankruptcy filers must take the debtor education course. You will not receive your bankruptcy discharge until you complete it. You also need to submit the certificate of completion to the court. If you need guidance on whether bankruptcy is right for you, you can speak with a bankruptcy attorney for free.

What Does the Course Cover?

Course content varies by district. Most providers cover these topics:

• How to prepare and manage a budget

• How to manage money and credit wisely

• How to understand consumer protection laws

• How to prepare for unexpected financial crises

You will learn useful tips to rebuild your personal finances. The course gives you practical skills for your fresh start.

How Long Does the Course Take and What Does It Cost?

The financial management course takes one to two hours to complete.

You can take the course online, by phone, or in person. Most people choose online or phone options. Remote filers, people with disabilities, and those without reliable transportation can use these methods. Your physical location does not matter as long as you use an approved provider.

The course costs between $10 and $50. The price depends on which provider you choose. Most providers offer filing fee waivers for low-income filers.

When Should You Take the Second Course?

You can take the debtor education course anytime after filing bankruptcy.

You must finish the course within 60 days of your scheduled 341 meeting. You also need to submit your certificate of completion within that timeframe.

The 341 meeting is your meeting of creditors. Your bankruptcy trustee runs the meeting to verify your bankruptcy paperwork. You receive the meeting date on a court notice after filing.

Understanding the bankruptcy timeline helps you stay on track. Mark important dates on your calendar. Missing meetings or deadlines can result in case dismissal.

What Happens If You Forget to Take the Course?

Forgetting the course or missing the deadline creates problems. The court could close your case without a discharge. Your debts will not be eliminated. Creditors can start collecting from you again.

You may not have to start over completely. You can file a motion asking the court to reopen your case. If approved, you submit the course certificate. You will pay a reopening fee. You can still receive your discharge once everything is filed correctly.

Contact your court clerk to learn how to file a motion. The clerk can explain the process. Filing the paperwork is usually straightforward.

How Do You Find an Approved Course Provider?

Every state has a list of approved debtor education providers. Providers are organized by district. You must use an approved provider. Otherwise, the court will not accept your certificate. You will have to retake the course.

North Carolina and Alabama work differently. In those states, the Bankruptcy Administrator approves course providers for your district.

How Do You Submit the Certificate to the Court?

The provider gives you a certificate of completion after you finish. You need to file the certificate with the bankruptcy court before receiving your discharge. Some providers file the certificate for you. Online course providers often handle this automatically. Others require you to file it yourself.

You also need to submit Official Form 423. People call it Certification About a Financial Management Course. Some providers file this form electronically with your certificate. If not, you handle it yourself.

You can file these documents in three ways:

• Online: Some courts allow electronic filing through their system. Check your court’s website for this option.

• In person: Bring the documents to the clerk’s office at your bankruptcy court.

• By mail: Mail everything to the court. Include your case number on all documents.

Check your court’s website if you are unsure about requirements. You can also call the clerk’s office for help. Confirm that both the certificate and Form 423 were received. Verify they were added to your case file.

After completing these steps, you are on track for your discharge.

How Is the Debtor Education Course Different From Credit Counseling?

The two courses serve different purposes.

The credit counseling course helps you understand debt relief options. You decide whether bankruptcy is your best choice. You take this course before filing your bankruptcy case. You include the certificate of completion with your bankruptcy forms when filing.

The debtor education course happens after filing. It teaches budgeting and money management for your fresh start.

Can You Use the Same Provider for Both Courses?

Yes. Many people use the same provider for both courses. Some approved providers offer discounts when you take both required courses with them.

How Does the Course Work in Chapter 13 Bankruptcy?

Chapter 13 is the second most common consumer bankruptcy type. It has similar requirements to Chapter 7. Chapter 13 takes much longer because of the required repayment plan. Repayment plans last three to five years.

In Chapter 13 bankruptcy, file your certificate before making your final plan payment. Filing on time prevents delays in receiving your Chapter 13 discharge. If you’re considering Chapter 13, you can speak with a bankruptcy attorney for free to understand your options.