What Is The Credit Counseling And Debtor Education Requirement?

It stands to reason that most, but not all, individuals filing for bankruptcy are not financially savvy. For some, they made some bad choices without considering the repercussions, others may have had an unforeseen situation, such as job loss or illness, that caused them to find themselves in financial ruin. No matter what the reason, it’s beneficial for everyone to learn how to manage their money, or lack thereof. When filing for bankruptcy, it is now required that the debtor, or debtors, enroll in and complete two financial classes during the course of their bankruptcy. One class, a credit counseling course, must be taken prior to the Springfield bankruptcy lawyer filing for bankruptcy and the second class, a personal financial management class, must be taken prior to discharge of the bankruptcy. Failure to complete these classes in a timely manner will result in the bankruptcy being closed without discharge, leaving the debtor still responsible for the outstanding debts.

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The credit counseling class, taken before filing for bankruptcy, will examine any possible alternatives to bankruptcy for the debtor. Counselors will examine the debtors budget and expenses and try to determine if a repayment plan is feasible instead of filing for bankruptcy. After completion of the class, the bankruptcy lawyer Springfield Missouri will file the required documents and the bankruptcy can proceed as planned.

After filing for bankruptcy, the debtor must enroll in the Debtor Education class prior to discharge. This class helps the debtor become more financially literate, something that is important for everyone, especially those that have had trouble managing money in the past. The class deals with topics such as managing money, saving money, following a budget, and using credit wisely. When the class is completed, the attendees will receive a certificate that must be provided to the court. Shortly after completion, the bankruptcy is completed and all debts are discharged.

Though many have no interest in attending the classes, the are of utmost importance in determining if bankruptcy is the proper option or if there is another alternative for the financially-strapped individual. The second class, Debtor Education, offers information that is essential to everyone attempting to manage their finances. The goal of the classes is to educate the debtor how to take advantage of their fresh start and how to manage their money effectively, thus avoiding financial distress again.