Confusion Between Credit Counseling & Debtor Education in Bankru...

Some things are inevitable. If an error can be made, it will be. Take for example, when filing for bankruptcy, the requirement of both credit counseling and debtor education. There is a particular sequence or order in which those requirements must be satisfied. Further, there is a proper timing for each requirement.

Within six months of filing a consumer bankruptcy case, the person must complete a credit counseling session by an approved provider of the counseling. If this is completed prior to six months of filing, then the certificate is stale and the person needs to retake the credit counseling and re-file another bankruptcy case.

After filing, the debtor must complete a 2-hour, financial management instruction course or the case will close without a discharge. Again, this class must be completed after the case is filed. Thus, if someone were to take the class before filing, it does not count and must be taken again.

Just yesterday, I had a client who was attempting to take the post-filing, debtor education class before the case was actually filed. This is despite all the measures and instructions that I have in place in an effort to prevent this from happening. The credit counseling requirement is what the debtor was attempting to satisfy, however, confusion prevailed.

I am currently working on a program that would eliminate this error. The first requirement would be named, 1 Before Filing and the second would be named 1 After Filing. I think that would definitely reduce the number of debtors who inadvertently take the wrong session at the wrong time.

1AfterFiling