What Is the Difference Between Credit Counseling and Debtor Education? Part One: Credit Counseling

When you file for Chapter 7 or Chapter 13 bankruptcy, you are required by federal law to satisfy credit counseling and debtor education requirements. In almost all cases, you are not permitted to file until you’ve received credit counseling, and your debts will not be discharged until you’ve completed the debtor education course. Here’s a breakdown of what credit counseling is, and what steps you will have to take to fulfill this responsibility.

What is credit counseling?

You must receive credit counseling from an agency approved by the U.S. Trustee’s office before filing for Chapter 7 or Chapter 13 bankruptcy. This credit counseling session can happen face-to-face, online, or over the phone. You must obtain a certificate of completion from your credit counseling course within the 180 days before you file your bankruptcy case.

The purpose of the credit counseling course is to determine whether there are options other than filing bankruptcy open to you. Typically, completing the course simply provides confirmation that you are unable to complete a repayment plan, and bankruptcy is the only option open to you.

You can find a federally approved agency through which to complete your credit counseling by visiting the United States Department of Justice website. There is a full list of agencies available, and they are searchable by state and region.

You’ll have to pay to complete credit counseling, and fees can differ by agency. However, each agency is required to disclose all fees prior to beginning a session, so you have the opportunity to “shop around” if necessary.

If you cannot afford to pay for credit counseling services, you may be entitled to a fee reduction or waiver.

If you have questions related to credit counseling, or you need help preparing to file for bankruptcy, contact the Law Office of Joel R. Spivack at (856) 488-1200.

We are here to help you.

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Attorney Joel R. Spivack is an experienced bankruptcy and residential real estate transactions lawyer in Cherry Hill, New Jersey. Clients come to us for legal services, but what we really provide is peace of mind. For more than 30 years, Attorney Spivack has helped people make wise, informed decisions about bankruptcy filings, debt relief options and residential real estate transactions.
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