When you file for bankruptcy, you will need to complete what is known as a “credit counseling” course before you file and what is known as a “financial management” course after you file. Since the U.S. Trustee Program does not operate in Alabama, you must instead use a Bankruptcy Administrator-approved provider for both credit counseling and debtor education. At Grainger Legal Services, our Alabama bankruptcy lawyers can help Alabama residents go through this process and properly complete the debtor education course requirement with an approved provider.
The Bankruptcy Administrator program is separate from the U.S. Trustee Program. The Bankruptcy Administrator program must approve your course in order to count for purposes of obtaining a discharge of debt in either a Chapter 7 or a Chapter 13 bankruptcy. All individuals who file for bankruptcy must take an approved debtor education course except for those whose disability prevents them from taking the class, those who are actively serving in a military combat zone, or those who do not have an adequate class available in their district.
The course usually costs around $50 or less. Our firm has chosen to absorb this expense for our clients. However, if your household income falls below 150% of the poverty line, the law will presume you are eligible for a waiver of the fee for the course. In some cases, a provider can still charge a reduced fee by overcoming that presumption and showing that your financial information indicates your ability to pay the reduced fee.
The course may be taken in person, online, or over the phone, and it usually lasts two hours. When the course is taken online or by phone, you must usually take a test and register a score of 70 percent or higher.
During the debtor education course, you will be instructed on how to manage your money and credit after you receive a discharge. The goal is to teach you how to make wise financial decisions so that you do not have to file for bankruptcy again. Topics of the class may include money management, the wise and effective use of credit, preparing and sticking to a budget, and consumer protection laws and agencies.
You will receive a course completion certificate upon successful completion. When filing for Chapter 7 bankruptcy, you will need to take the class and file a certificate of completion within 60 days of your Section 341 hearing. When filing for Chapter 13 bankruptcy, you will need to file the certificate of completion before you make your last plan payment. Generally, if you fail to complete the debtor education class by the appropriate deadline, you will not receive a discharge, which is usually the main goal of filing for bankruptcy.
At Grainger Legal Services, our Alabama bankruptcy attorneys can counsel individuals on filing for Chapter 7 or Chapter 13. We can also advise you on how to avoid losing control of your finances again after you have received a discharge. There are strict rules as to how frequently you may file for bankruptcy or get a discharge, so it is important to use the proceeding to truly start over with a clean slate and develop good financial habits. We have offices in Montgomery, Prattville, and Troy. Call us at (334) 260-0500 or contact us online to schedule a free consultation.