Credit Counseling and Debtor Education: What’s the Difference?

Finance Meeting

When you file for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you will be required to complete both a credit counseling and debtor education course. Many people who end up filing for bankruptcy either wrongly assume that they only have to do one or the other, or even that they don’t have to complete either.

The Difference Between Credit Counseling and Debtor Education

Credit Counseling – Prior to filing for Chapter 7 bankruptcy, you will have to complete a credit counseling course. The course must be approved by the U.S. Trustee’s office, and can typically be done either in person, on the phone, or over the internet.

In most cases you will be required to have finished the credit counseling within 180 days before you file a petition for bankruptcy. When you go to file your petition, you will have to submit your certificate of completion along with it.

The primary purpose of the credit counseling course is to give you the opportunity to examine your financial situation more thoroughly and determine whether or not you have alternative options available besides bankruptcy.

Debtor Education – In order to receive a bankruptcy discharge, you must have completed a debtor education course as well. If you file for Chapter 7 bankruptcy, you have to complete the course within 60 days after your initial 341 hearing (a.k.a. meeting of the creditors). You must have a certificate of completion before you make your final payment in Chapter 13 bankruptcy.

While credit counseling focuses on your finances prior to filing bankruptcy, the purpose of completing the debtor education is to help you become financially stable after bankruptcy. The course should help you learn how to manage money and credit more efficiently.

Both courses are designed to help you make the best decisions, and really shouldn’t be looked at as a burden, but as an opportunity to learn how to achieve financial peace.

If you are thinking of filing for bankruptcy, call or fill out an online form for a free consultation and find out how Washington D.C. bankruptcy attorney Kevin D. Judd can help you achieve financial freedom.

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