If you are faced with the unfortunate task of filing for bankruptcy in your near future, you should know about some important educational requirements. The Federal government has set up these educational requirements for people filing chapter 7 bankruptcy in an effort to cut down on repeat filings. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) signed by President Bush was created in an attempt to educate consumers about their finances. Two classes are now required; one before you file and one before your bankruptcy discharge. Read on for more information about these two classes.
The Credit Counseling Class
This class must completed before you file. The major component of the credit counseling class is the creation of a budget using your actual present financial status. Once filed with your bankruptcy petition, a credit counseling agency reviews your budget to determine the possibility that you could repay your debt without filing for bankruptcy.
As part of the bankruptcy process, the credit counseling agency will prepare a report of your financial picture. If the agency report contends that you should be able to pay off your debts without filing for bankruptcy, you may have to take some extra steps to allow your bankruptcy petition to go forward. You will be allowed to refute the report and explain why the credit agencies suggestions won't be enough to prevent bankruptcy at the creditor's meeting.
This classes can be taken online, in person or even over the phone. The cost of the class is calculated using a sliding scale based on your income. You will receive a certificate at the end of the class, which has to be filed with your bankruptcy petition.
The Personal Finance Class
This class gives participants information on how to prepare a budget, preparing for financial emergencies and how to use credit wisely. The Justice Department, who oversees and manages the administrators of the class, provides a list of approved agencies, and you can take the class in person, online or through the mail. You will receive a certificate upon completion which must be filed with the court within 45 days after your creditor's meeting. The cost for the class is based on a sliding scale with your income.
It's important to note that participation in these classes is not optional. Failure to turn in your proof of participation could place your ability to discharge your bankruptcy in jeopardy. A bankruptcy attorney like Michael Adler will serve as an invaluable resource when fulfilling these requirements as well as throughout your bankruptcy process.Share