The Difference between Credit Counseling and Debtor Education in Bankruptcy

It is necessary for a debtor who wants to file for a Chapter 7 or 13 bankruptcies to undergo credit counseling and also take up the debtor education course. So if you want to get your bankruptcy discharged, you should know what these two required courses are and how they can help you.

Credit Counseling

You need to undergo bankruptcy credit counseling before you can file for bankruptcy under Chapter 7 or Chapter 13. This is a course which makes sure whether or not you should file for bankruptcy. It assesses your credit, your income and your expenses in order to find a way for you to handle your debts without the need to file for bankruptcy.

After the course, you will obtain a certificate within 180 days which proves that you have completed it. The results will tell you what to do afterwards, if you should continue filing for bankruptcy or simply undergo the repayment plan or other alternative method they recommended you. If you fail to complete the course, however, the court will simply dismiss your bankruptcy petition.

The purpose of this course is to find out a way for you to fix your debts without going through the bankruptcy process. You could say it’s an assessment as to whether or not you are legible to file for bankruptcy. This also helps make it easier for the court to handle bankruptcy cases and not have piled up petitions which may simply be solved by other methods.

Debtor Education

This is a course which you can only take after you file for bankruptcy and is required for you to possibly get a discharge. You need to take this course from an approved agency and will receive a certificate of completion which you will need to file in court. Like the credit counseling, you will lose your case if you fail to complete the course. Your case will also not receive a discharge and will require you to pay additional fees in order for it to be opened once more.

The purpose of the debtor education focuses on your life after you receive your bankruptcy discharge. The course will teach you how to manage your money and credits better. It will also let you know how to make the most of your bankruptcy discharge. The main goal of the course is to teach debtors how to be financially stable and educated to prevent bankruptcy in the future.


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