Filing for bankruptcy takes more than simply submitting some paperwork to the court and appearing before a judge. For example, debtors in Louisville who are considering filing for Chapter 7 bankruptcy must complete two courses: a pre-filing credit counseling course and a debt management course. The credit counseling course must be completed within 180 days before the debtor will be allowed to file for Chapter 7 bankruptcy. The debt management course is required to have the debtor's debts discharged through the Chapter 7 bankruptcy process, and is completed after filing.
In the credit counseling course, the debtor's personal finances will be reviewed. If there are any alternatives the debtor has to filing for bankruptcy, these will be reviewed. Finally, a personal budget plan will be created. The course only takes approximately one hour. Moreover, it can be completed via the Internet, through a phone call or in-person. In general, the course costs about $50, but it may be possible to waive this fee. Once the debtor finishes the course, he or she will be issued a certificate, which is necessary to prove the course requirement was met.
In the debt management course, the debtor will create a budget. There will also be a discussion regarding the responsible use of credit, and how to manage one's finances. This course will usually last approximately two hours. It can be completed via the Internet, through a phone call or in-person. It will cost somewhere in the range of $50 to $100, although it may be possible to waive this fee. Once the course is completed, the debtor will be issued a certificate to use to prove that the course requirement was met.
The credit counseling course and debtor education course are both necessary components of discharging one's debts through Chapter 7 bankruptcy. They are not very onerous, and can provide debtors with some useful information regarding bankruptcy and their finances. Through bankruptcy, the debtor will be able to wipe out debt, paving the way for a brighter financial future.
Source: FindLaw, "Bankruptcy: Counseling Before Filing," Accessed Oct. 30, 2016