Getting Your “Debtor Education” Before Completing Your Bankruptcy Case

During the 180 days before filing bankruptcy, you must go through an easy “credit counseling” course to be able to file your case. Then after filing bankruptcy, you must also complete “an instructional course concerning personal financial management” before you can get a discharge (legal write-off) of your debts. This second step is usually referred to as the “debtor education” requirement.

It is required in both Chapter 7 and Chapter 13 cases. See Sections 727(a)(11) and 1328(g) of the Bankruptcy Code.

This Seond Easy but Crucial Step

This after-filing requirement is all too easy to forget about. You can’t file a bankruptcy case without doing the earlier “credit counseling” course, so it’s impossible to disregard that one. But once your case if filed and you get its immediate relief, it is natural to pay less attention. What’s important to realize is that if you do not complete the debtor education course, your bankruptcy case will close without you receiving a discharge (write-off) of your debts.

The main goal of bankruptcy is to discharge your debts. You certainly don’t want to go through all the effort and expense and not reach that goal.

What Is “Debtor Education”?

It is a 90-minute or so class—done online, over the phone, or in person—“designed to assist debtors in understanding personal financial management“—such as the appropriate use of credit, and budgeting skills. If spouses file a bankruptcy together, both have to take the course. More people tend to find it worthwhile than the pre-bankruptcy “credit counseling” course. It can be provided to you in languages other than English.

Important: upon completing “debtor education,” you receive a certificate of completion which must be filed at the court. Be sure to coordinate that with your attorney, because the court must have that certificate on file on time.

What Happens lf the Course Is Not Done on Time?

If your bankruptcy case is finished and the court closes the case before receiving the certificate of completion proving that you’ve completed the “debtor education” requirement, the judge will not sign the usual order discharging your debts. If the education requirement is completed afterwards, the judge could likely be persuaded to reopen your case and enter the discharge order. But for two reasons you really want to avoid getting into this situation:

  1. It would cost hundreds of dollars more in “re-opening” filing fees, plus attorney fees, for these extra steps.
  2. Your creditors could collect on their debts from the time your case is closed until this problem is corrected.

Clearly, it makes sense to take the “debtor education” course on time and avoid these consequences.

If you live in Texas near Rockwall, Heath, Greenville, Lavon, Wylie, Mesquite, or Rowlett, contact me, bankruptcy attorney Carrie Weir, to help you go smoothly through the bankruptcy process. To receive a careful, personal analysis of all your options, call for a free and confidential consultation. Please call me at 972-772-3083 or use the contact form here . Thank you.

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