The bankruptcy law requires debtors to attend two educational courses. The first requirement calls for a "debt management course" and must be completed prior to filing – your certificate of completion is your "ticket in" to the bankruptcy process.
The second course, which is the subject of this post, is the "ticket out." Known as the "financial management course," this educational requirement involves education about budgeting, interest rates and other financial managment tools that will, hopefully, keep you out of bankrutpcy in the future.
In a Chapter 7 case, you are supposed to complete your financial management course within 45 days from the 1st date set for your Section 341 meeting of creditors hearing. In a Chapter 13 case, you must complete the financial managment course prior to making your last Chapter 13 payment or prior to the closing of your case.
If you do not complete your financial managment course requirment and file your certificate of completion (your attorney will file this for you), you will not be eligible for a discharge.
In my practice I recently represented a Chapter 7 debtor who did not complete her course prior to her case being closed and we had to reopen her case for the sole purpose of filing the financial management course certificate. So far, it appears that most bankruptcy judges will permit such reopenings, but be aware that there is a filing fee to do this as well as an attorney’s fee for the time involved.
Most of the vendors who provide pre-filing debt counseling will also provide financial managment courses as well. The list of vendors that I provide to my clients can be found on my BankruptcyWorksheet web site.
I always advise my clients to get the Financial Management course out of the way. You are not likely to think about this requirement 4 years into your Chapter 13 and the only notice set out by the clerks’ office is done a couple of months into your case.
The Financial Managment course can be taken by phone or over the Internet and it will last only a few hours. I would be interested to hear from anyone who has taken this course to get your observations and thoughts about its value.