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What is the Kentucky Chapter 7 debtor education course?

Filing a Chapter 7 Bankruptcy is not an easy decision. There may be many reasons why Kentucky residents do not wish to file such a case, including the affect it may have on a person’s credit rating and the perceived stigma that can sometimes be associated with such a filing. However, in many cases, the outcome of having debts discharged is worth the time and hassle, and other negative consequences that may result.

To receive that discharge, however, people filing for individual bankruptcy must complete a course of instruction in personal financial management, also called “debtor education.” This course should not be confused with credit counseling, which is a distinct and separate requirement. While credit counseling is done beforehand in hopes of potentially coming up with a payment plan that can avoid the bankruptcy filing, the debtor education course is completed during the bankruptcy process and has the goal of teaching the debtor how to handle financial matters with an eye toward preventing a future need for the bankruptcy process.

The debtor education course may cover topics such as budgeting, financial management and how to handle unexpected financial crises. It must be completed within 60 days of a debtor’s first scheduled creditor meeting date in a Chapter 7 case. The only people who are exempt from this requirement are those with a disability that prevents them from taking the course, or those who are on active military duty in a combat zone.

While many Kentucky residents who file for bankruptcy may be doing so due to an unexpected event, such as a job loss, injury or serious illness, they may still benefit from taking the debtor education course. Since it’s a requirement for discharge, those filing Chapter 7 bankruptcy may wish to look at it as a positive step to completing their journey to a new financial future.

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