Posted on: 29 August 2016Share
If you have heard of people that take advantage of bankruptcy for financial reasons, then you may understand why it was necessary for the courts to add some new provisions onto the bankruptcy code. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 added two different classes for filers to undergo as a requirement to file and have a bankruptcy discharged. This law, and the resulting classes, attempt to discourage repeat filers, but everyone is required to take them. Read on to learn more about these two classes.
The Credit Counseling Class
This is the first of the two classes and you can actually complete it up to 180 days before you ever file for bankruptcy. The certificate of completion is part of your bankruptcy filing package, just like your creditor matrix and other important documents. The major point of this class is to allow a credit counseling agency to view a complete picture of your finances and determine whether or not you actually need to file for bankruptcy in the first place. You might want to consider this requirement more of a test than a class, since if the credit bureau looks at your budget and deems you are able to pay your debts without bankruptcy, you may be barred from filing. Needless to say, being exact and realistic with your numbers when completing this "budget" is vital.
In the event that the agency decides that you not be allowed to file for bankruptcy due to your financial situation, you are given the opportunity to refute the findings at the creditor's meeting. Your bankruptcy attorney will work with you on this rebuttal, so don't be discouraged by this small hiccup. This class may be taken online, over the phone, or in person. The cost depends on your income.
Personal Finance Class
The second of the two classes is far less stressful, since it comes after your filing but before your discharge and focuses on learning to use money more wisely. You can take the class no more than 45 days after the creditor's meeting, and it must be given by a Justice Department approved debt counseling agency. In this class, you will learn to prepare a budget, how to recover from bankruptcy, how to save for emergencies and how to use credit. Like the other class, it can be taken online, over the phone, and in person.
For information about these two consumer finance education requirements, speak with your bankruptcy attorney.