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Credit counseling, debtor education are part of bankruptcy

Bankruptcy proceedings have numerous specific requirements, which must be followed closely and carefully. The requirements are designed for the protection, and sometimes education, of those persons filing for bankruptcy protection. Two requirements that aim to educate bankruptcy filers who are filing for personal bankruptcy protection, such as Chapter 13 bankruptcy, are that of credit counseling and a debtor education course.

Floridians seeking debt relief through bankruptcy are required to receive credit counseling from a government-approved agency in the 180 days prior to their bankruptcy filing. These courses, which typically take between 60 and 90 minutes, may include an evaluation of a debtor's personal financial situation, as well as discussion of a personal budget plan. The credit counseling may occur in person, over the telephone or online. When a debtor files for bankruptcy, he must file his certificate of credit counseling completion as part of the filing.

A debtor education course is required of bankruptcy filers before their debts will be discharged. This education course must occur after a debtor has filed for bankruptcy, and a debtor will have to provide evidence of completion of the course before his or her debts are discharged. The course will likely include information on how best to develop a budget, how to manage money and how to use credit appropriately. This course may also occur in person, over the telephone or online.

Bankruptcy often involves a lot of unknowns for a debtor, and these courses are intended to help provide education for those looking for a fresh financial start. It may also be helpful for debtors to have attorney guidance during the bankruptcy process to not only help with the actual filing process, but to also answer any questions that may arise.

Source: Federal Trade Commission, "Filing for Bankruptcy: What to Know", accessed Nov. 6, 2015

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