Bankruptcy counseling and course requirements are used for many reasons. Generally speaking, pre-bankruptcy counseling is used to determine whether or not bankruptcy is the only solution.

Before filing a petition for bankruptcy under Chapter 7 and Chapter 13 of the Bankruptcy Code, the debtor must undergo pre-bankruptcy counseling. The counseling must be approved by the U.S. Trustee’s Program. These counseling courses vary and it is important for the debtor to do some research in order to ensure that he or she is getting the right counseling advice.

Pre-bankruptcy counseling will usually include an overall evaluation of the debtor’s financial situation and personal budget. Also, pre-bankruptcy is done in order to discuss the debtor’s alternatives to filing bankruptcy. This type of counseling does not take a long time and can be done in person, over the telephone, or even online. Pre-bankruptcy counseling can cost the debtor a set fee. However, in some circumstances, the debtor can avoid the fee if he or she is unable to pay it. It is important for the debtor to ask about any fees prior to engaging in the counseling session.

After completing the pre-bankruptcy counseling, the debtor will receive a certificate that serves as proof of completion of the course. This certificate should be submitted to the court.

Along with pre-bankruptcy counseling, a debtor must take a debtor’s education course. However, this course is taken after filing bankruptcy. Like the pre-bankruptcy counseling, this course must be approved by the U.S. Trustee’s Program and can be taken over the phone, in person, or online. There is a fee for this course and it is typically between $50 and $100. However, if the debtor is unable to pay the fee, it is possible to be excused from it. This course is typically more in-depth than the pre-bankruptcy counseling. Also, it usually takes longer to complete this course, however it is still a relatively short course.

For this course, money management, budget preparation, credit advice, and other important financial issues are discussed. Like the pre-bankruptcy counseling, after the completion of this course, the debtor shall receive a certificate acknowledging the course’s completion. This certificate is completely different from the pre-bankruptcy counseling and a debtor should make sure of this upon receiving the certificate.