Bankruptcy Credit Counseling & Financial Management Courses: A Complete Guide

If you’re filing for bankruptcy, you’ll need to take two required courses: one before you file and one after. The first course, credit counseling, helps you understand your debt relief options and decide whether bankruptcy is right for you. The second course, debtor education, teaches you how to manage your money and rebuild your finances after bankruptcy.

In this article, we’ll explain what each course covers, how to take them, and why completing them is essential to getting your debts wiped out. Let’s get started!

What Are the Two Bankruptcy Courses and Why Are They Required?

If you plan to file bankruptcy, you must take two required courses. The first is a credit counseling course, which you must complete in the 180 days before you file your case. This helps you understand your debt relief options and decide if bankruptcy is the right choice for you.

The second is a debtor education course, which you have to take after you file your bankruptcy case but within 90 days of your 341 meeting of creditors. This course teaches financial management skills. It’s designed to help you make the most of your fresh start.

Both courses are required to get the bankruptcy discharge, which is the court order that wipes out your eligible debts.

What Is the Credit Counseling Course?

The pre-filing credit counseling course is the first step in the bankruptcy process. Though it’s often called a course, it’s really a session where you work with a certified counselor to review your finances and explore debt relief options.

This session helps you understand your financial situation and decide whether bankruptcy is the right choice for you. That’s why it’s required before you file a Chapter 7 or Chapter 13 bankruptcy case. You must file within 180 days of taking the course.

The course must be completed through an approved agency. More on this in the next section.

Credit Counseling Basics: Cost, Time, and Where To Take It

Here’s what you need to know about completing the credit counseling course:

• Cost: Most providers charge $20–$50. If you can’t afford the fee, you may qualify for a fee waiver based on your income. Be sure to ask about this option when you sign up.

• Time: The session usually takes 1–2 hours to complete.

• Where to take it: You can complete the course online, by phone, or in person, whichever works best for you.

You have to take the course from a U.S. Trustee-approved credit counseling agency. You can find a list of approved agencies on the U.S. Trustee Program’s website. If you’re in Alabama or North Carolina, check the bankruptcy administrator’s website instead. Make sure to choose a provider approved for your state and judicial district.

How To Get Your Credit Counseling Certificate

After completing the credit counseling session, you’ll receive a certificate of completion from the approved provider. This certificate is your proof that you’ve met the pre-filing requirement.

As mentioned, the certificate is valid for 180 days (six months). If you don’t file your bankruptcy case within that time, you’ll need to retake the course. And remember: You must include this certificate when you file your bankruptcy paperwork with the court.

Most people take the credit counseling course close to when they plan to file so the certificate doesn’t expire.

Is It Worth Taking if You’re Not Sure About Filing Bankruptcy?

Yes, many people find it’s worth taking even if they don’t end up filing for bankruptcy. That’s because the credit counselor will give you personalized insights into your financial situation. They can also help you if you decide to pursue another debt relief option, like a debt management plan, if you don’t want to file bankruptcy.

Knowledge is power, and this session can help you decide whether bankruptcy is the right choice for you or if there’s a better path to get back on track financially.

What Is the Debtor Education Course?

Before the court will grant your bankruptcy discharge — the order that wipes out your eligible debts — you must complete a debtor education course. This course is also called the financial management course. It teaches practical skills to help you manage your money and rebuild your finances. It covers key topics like:

• How to budget and manage your income

• How interest rates work

• How to rebuild your credit

• How to use credit cards responsibly

People file for bankruptcy for many different reasons, and it’s often due to circumstances outside of their control — like a job loss or major medical bills — not poor financial management. But even so, all filers have to take this course.

Financial Management Course Basics: Cost, Time, and Where To Take It

The debtor education course must be completed after your case is filed. Here’s what you need to know:

• When to take it: You’ll need your bankruptcy case number to sign up, so the course can only be taken after filing. Many people complete it before their 341 meeting of creditors to avoid forgetting later.

• Time and cost: The course takes about two hours to complete and usually costs between $10–$50, depending on the provider. You may be eligible for a fee waiver if you can’t afford this.

• Where to take it: You can complete the course online, by phone, or in person, but you must choose an approved provider.

When you finish, the provider will issue a certificate of completion, which you’ll need to submit to the court within 60 days of your 341 meeting. If you miss this deadline, your case could be dismissed without a discharge.

How To Find Approved Providers for the Required Bankruptcy Courses

As mentioned, you’ll need to take both required courses from a U.S. Trustee-approved course provider (or a bankruptcy administrator-approved provider if you live in Alabama or North Carolina). 

You can find a list of approved providers for both courses on the U.S. Trustee Program’s website. When searching for a provider, make sure you’re on a .gov website to ensure the information is trustworthy and accurate.

Many Upsolve users take their courses through DebtorCC, but you can pick any nonprofit on the approved list. If you live in a large state, double-check that the provider you select is approved for your specific judicial district.

Let’s Summarize…

You’ll need to complete two required courses: a credit counseling course before you file and a debtor education course after you file. The first course must be taken within the six months before you submit your forms. For the second course, you have up to 60 days after your 341 meeting to finish it, though many people complete it earlier. Both courses are offered by nonprofit providers approved by the U.S. Trustee or the bankruptcy administrator.