Bankruptcy Articles

Tuesday, September 23rd, 2008

by Theodore Sliwinski, Esq.

Credit Counseling and Debtor Education Courses ‑ Bankruptcy Reform Act

Under the old bankruptcy law, you could file for bankruptcy at any time. Now, before you will be able to file for either chapter 7 or 13 bankruptcy, you will have to participate in a credit counseling session within 6 months of the filing. After successfully filing for bankruptcy, you will also have to pay for and attend a debtor education class in order to relieve your debts.

Credit Counseling

During your credit counseling session, a certified credit counselor will help you explore your options. Your credit counselor will be a qualified financial adviser who will help you decide if bankruptcy is the right choice for you. In addition, he or she is required by law to offer you impartial advice. This means that he or she cannot lead you to make a specific financial decision.

Your credit counseling session may be in the form of a simple phone call to a credit counseling agency. You may even be able to send a credit counseling agency your information through the internet. You will probably spend about one hour discussing your situation with the credit counselor. When you have completed your credit counseling info seminar, you will receive a certificate. You will then be eligible to file a chapter 7 or 13 bankruptcy.

Debtor Education Course

In order to relieve your debts, you will be required to complete a debtor education course. The purpose of this course is to teach you how to better manage your finances after your bankruptcy. It will take more time to complete than your credit counseling session and may last from 1 to 1.5 hours. The cost to receive the debtor education course is $50. This means that filing for bankruptcy will cost you more money. Most of my client’s complete the debtor education course by phone or by the internet. The course normally takes about an hour and a half. Most of my clients advise me that it is a waste of time. Once you complete the debtor education course then you will receive a certificate of debtor education. Thereafter, you must file the certificate of debtor education with the bankruptcy court, and you will then receive your discharge within 60 days.

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