Back To School: Bankruptcy Educational Requirements

Posted on: 15 December 2016


If your financial situation has worsened and you are thinking about declaring bankruptcy, you should know that there are some additional requirements that attempt to ensure that you learn from your financial mistakes. Read on to learn more about these classes that you must take before you can get your bankruptcy finalized.


The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 was a powerful bit of legislation aimed at preventing people from having to declare bankruptcy again and again. These education requirements sought to inform consumers about using credit more wisely in the future, budgeting, and more.

The Credit Counseling Class

The first requirement is actually a method of qualifying for debt relief. You must show, by preparing a budget that details your present financial situation, that you have absolutely no other options but to declare bankruptcy. A credit counseling agency must evaluate your budget and ascertain if there is any way for you to improve your financial situation without filing for chapter 7 bankruptcy. If the agency determines that you could actually pay your debts without declaring bankruptcy, given your income, then you must be able to refute that by showing that the agency's recommendations won't work in your case.

This class can be taken within the 180 days before you file for bankruptcy and is available online, in person, and even over the phone. You must have the class completion certificate in hand to file for bankruptcy, and it must accompany the bankruptcy petition. This "class" does have a fee, but it is based on your income and is free for those who fall under a given income level.

The Personal Finance Class

The second required class focuses more on the financial education aspect, with instruction in budget preparation, using credit wisely, saving for a "rainy day," and more. You have 45 days to complete this class after your creditor's meeting, and the proof of attendance must be filed with the bankruptcy courts. You can expect to spend about 2 hours taking this class, and the fee for this class is also based on your income. You can take the personal finance class in person, online, or through the mail. Unlike the Credit Counseling class, you are allowed to choose your own class provider, but it must be on the list of the Justice Department's approved agencies.

To learn more about fulfilling these educational requirements, speak with a bankruptcy attorney like Thomas A Blake.