Counseling And Education Requirements Before Claiming Bankruptcy

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The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 started a new era for filing bankruptcy. Anyone who need protection from their creditors by filing for bankruptcy in the United States must now get credit counseling from a approved government organization within one hundred and eighty days before they can file. A debtor education course must also be completed to have their debts discharged.


The United States Department of Justice Trustee Program holds the authority to approve organizations that want to provide the debtor education and credit counseling that is mandatory. Only the educators and counselors that appear on the United States Trustee Program's list can advertise themselves of being listed and approved to provide the debtor education and counseling that is required. Under law, the United States Trustee Program doesn't operate in North Carolina and Alabama, because in these states, court officials that are called Bankruptcy Administrators approve pre-discharge debtor education course providers and pre-bankruptcy credit counseling organizations.

Education And Counseling Requirements

As a general rule, pre-discharge debtor education and pre-bankruptcy credit counseling may not be provided at the same time. Credit counseling must happen before you file for bankruptcy and debtor education must be completed after you file. As a general rule, you must file a certificate that you completed credit counseling when you file for bankruptcy, and provide evidence that you completed the required debtor education after you have filed for bankruptcy, but before your debts are discharged. Only course providers of debtor education and credit counseling that have been approved by the United States Trustee Program may issue you one of these certificates. To protect against fraud, these certificates are numbered and are produced through a central automated system.

Pre-bankruptcy Counseling

A pre-bankruptcy session in counseling with an credit counseling organization that is approved should include a personal financial situation evaluation, a personal budget plan, and a discussion of bankruptcy alternatives. A counseling session typically should last about sixty to ninety minutes, and can take place on the phone, in person, or online. The counseling organization is required to provide this counseling, without charge, for people who can't afford to pay. You should request a fee waiver, if you can't afford to pay, from the counseling organization before the session begins. If you don't, you may be charged a fee for the counseling, which is usually about fifty dollars, depending on the types of services you receive, where you live, and other factors. Before starting the counseling session, the counseling organization is required to discuss any fees with you.

You must get a certificate as proof, after you have completed the counseling that was required. Check the website of the United States Trustee's to make sure that you receive the certificate from a counseling organization that is approved in the judicial district where you are filing for bankruptcy. Credit counseling organizations are not allowed to charge a extra fee for the certificate.

Post-Filing Debtor Education

A approved provider debtor education course must contain information on developing a budget, using credit wisely, managing money, and other resources. Like pre-filing counseling, debtor education may be provided on the telephone, in person, or on the internet. The debtor education session can last about two hours longer than the pre-filing counseling and the fee is usually between fifty and one hundred dollars. As with pre-filing counseling, if you are unable to pay the session fee, you should seek a fee waiver from the debtor education provider. Check the list of approved debtor education providers at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the bankruptcy clerk's office in your district.

You should receive a certificate as proof after you have completed the debtor education course that is required. This certificate is separate from the certificate you will receive after you complete your pre-filing credit counseling. Check the United States Trustee's website to be sure that you receive the certificate from a approved debtor education provider in the judicial district where you filed for bankruptcy. Debtor education providers may not charge an extra fee for the certificate, unless they have disclosed a charge to you before the counseling session begins.

Important Questions to Ask When Choosing a Credit Counselor

It is advised to do some research when choosing a credit counseling organization. If you are in search of credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk's office for the district where you will file. Once you have the list of approved organizations in your judicial district, call several to gather information before you make your choice. Some important questions to ask are:

1) What services do you provide?
2) Will you help me develop a plan for avoiding problems in the future?
3) What fees do you charge?
4) What if I can't afford to pay your fees?
5) What qualifications do your counselors have? Are they accredited or certified by an outside organization? What training do they receive?
6) What do you do to keep information about me (including my address, phone number, and financial information) confidential and secure?
7) How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?

For More Information and Assistance

The United States Trustee Program promotes efficiency and integrity in the nation's bankruptcy system by providing oversight of private trustees, enforcing bankruptcy laws and maintaining operational excellence. The Program has twenty-one regions and ninety-five field offices, and oversees the administration of bankruptcy in all states except North Carolina and Alabama. For more information, visit usdoj.gov/ust.

If you have concerns about debtor education course providers or credit counseling agencies that are approved, such as the failure to provide adequate service, please contact the United States Trustee Program by email at USTCCDEComplaintHelp@usdoj.gov, or in writing at the Executive Office for U.S. Trustees, Credit Counseling and Debtor Education Unit, 20 Massachusetts Avenue, N.W., Suite 8000, Washington, D.C., 20530. Provide as much detail as you can, including the name of the debtor education course provider or credit counseling organization, whom you spoke with, and the date of contact.

Read about Getting Out Of Debt

You may also want to read How To Choose A Credit Counselor

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Although all information has been written in good faith and reviewed, please email us at help@consumerbadcreditguide.com to report any inaccuracies.