People who seek the protections of the Florida bankruptcy courts are always asking about what are the bankruptcy credit counseling and debtor education requirements. After all, when one is delinquent on debt and is seeking bankruptcy relief how can credit counseling and debtor education help with the debt? The federal bankruptcy law, BACPA (Bankruptcy Abuse Prevention and Consumer Protection Act of 2005), can answer the question. With almost no exception, those considering a bankruptcy must take credit counseling at least 6 months before a bankruptcy petition can be filed. After a bankruptcy is filed a debtor must also take an education course to have their debts discharged.
If you look at the name of the federal bankruptcy law, abuse prevention and consumer protection are at the center of the requirements imposed on those seeking to file bankruptcy. For instance, pre-bankruptcy counseling was established to allow potential debtors considering filing bankruptcy with an opportunity to evaluate their personal financial situation. In essence, the purpose of the bankruptcy credit counseling course is to provide a detailed discussion of a person’s financial picture while also providing a discussion of options and other legal alternatives to bankruptcy. Credit counseling institutions must be approved by the federal government, those who finish the courses get a certificate, and payment for the counseling session may be provided free of charge if the consumer cannot afford to pay.
The post-filing debtor education course is completed after filing the bankruptcy but prior to receiving a discharge of debts. The typical course must also be approved by the federal government, and includes information on developing a financial budget so that the same situation does not take place again in the future. In summary, the debtor education course is a refresher on how to be conservative with one’s money and a primer and future reference on managing money and credit transactions. Both the bankruptcy credit counseling and debtor education courses are part of the federal law’s focus on promoting integrity and efficiency in the bankruptcy process and helping consumers overcome over-aggressive bankruptcy petition preparers and other unscrupulous individuals who promote fraudulent, deceptive business practices.