Before You File for Personal Bankruptcy: Credit Counseling and Debtor Education

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get credit counseling from a government approved organization within 180 days before they file. They also must complete a debtor education course to have their debts discharged.

Pre Bankruptcy Counseling - A pre-bankruptcy counseling session with an approved credit counseling organization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online.

Post Filing Debtor Education - A debtor education course by an approved provider should include information on developing a budget, managing money, using credit wisely, and other resources. Like pre-filing counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing counseling two hours and the typical fee is between $50 and $100.