The Department of Justice operates the U.S. Trustee Program to oversee U.S. trustees and to administer the education requirements of the current Bankruptcy Code, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The two exceptions to this administrative control are Alabama and North Carolina, in which the courts’ bankruptcy administrators are in charge of approving credit counseling and debtor education providers.
The Code requires individuals planning to file for bankruptcy to attend two classes from approved providers; one before filing and one after filing. Because of the timing requirements, the two courses may not occur simultaneously. Both courses may be conducted in person, via phone or over the internet. It is very important to make sure that the two providers are approved by the U.S. Trustee Program. To see a list of approved counselors in your area, visit the program’s website or the clerk’s office for your bankruptcy court.
The first course is the credit counseling session, which must occur 180 or fewer days before filing. Counselors analyze the debtor’s financial situation and discuss budgeting and alternatives to bankruptcy. The counseling session usually lasts for about an hour to an hour and a half and costs approximately fifty dollars. The exact fee depends on many factors, such as the provider’s location and services provided. For those who cannot afford the fee, the course is provided free of charge if the debtor asks for a fee waiver prior to the beginning of the session. The provider must disclose any fees prior to starting a billable session with the debtor. To prove that the course has been completed, a debtor must submit a certificate of credit counseling completion with his or her bankruptcy filing. These certificates are printed through a central service and are numbered to ensure that a debtor has not merely copied another person’s certificate. The counselor is not permitted to charge an additional fee for the certificate.
After the bankruptcy case has been processed, the debtor must attend another counseling course, commonly known as a debtor education course, in order to receive a discharge (i.e., a final pronouncement from the bankruptcy court stating that all of the debtor’s debts are deemed paid, even if they were only paid in part in the course of the repayment plan or liquidation of the debtor’s assets). Course providers typically discuss personal finance topics such as budgets, money management and credit. The session usually lasts for approximately two hours and costs fifty to one hundred dollars. For those who cannot afford the fee, the course is provided free of charge if the debtor asks for a fee waiver prior to the beginning of the session. To prove that the course has been completed, a debtor must submit a certificate of completion to the bankruptcy court. The counselor may charge an additional fee for the certificate if said fee is disclosed prior to the course.