The Consumer Protection Act of 2005 and the Bankruptcy Abuse Prevention Act require that people planning to file for bankruptcy must get credit counseling 180 days before they file. Then after you file you must complete a debtor education course. Both may be provided on-line, by phone or in person. The courses are approved by the U.S. Trustee Program in all states except Alabama and North Carolina. In these states, a Bankruptcy Administrator approves the organizations and course providers.
The pre-bankruptcy credit counseling should last approximately one and a half hours. The course cost is approximately $50, but if you cannot afford it request a fee waiver prior to taking the course so that you will not be charged the fee. The course should provide you with information such as bankruptcy alternatives, an evaluation of your current financial situation and a plan to budget your finances. The credit counseling organization should also be approved in the same district as where you will be filing. When it is time to file for bankruptcy you must file your certificate of credit counseling provided to you when you completed the course.
After you have filed bankruptcy you must take the second course, which is a debtor education course. This course cost between $50- $150 and may last as long as 2 hours. Again, you should ask for a fee waiver if you cannot afford the course. The course should provide information to you about managing your money, how to develop a budget and how to use credit in an effective manner. Upon completion of the course you will be sent a certificate and then will be required to show proof of completing the course to the courts. When choosing a credit counselor you should research wisely. Make sure they are approved in the same district you are filing in. You may check with the bankruptcy clerk’s office or go to www.usdoj.gov/ust to discover who is approved in your district to council.