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Debtor education and credit counseling 101

When people make the decision to file for bankruptcy in Washington D.C., they are required to take credit counseling and debtor education courses that have been approved by the United States Trustee Program. These mandatory classes help debtors understand the implications of filing for bankruptcy, as well as how people can manage their money in a way that will reduce their risk of falling into the same financial situation.

At least six months prior to filing for bankruptcy, debtors must enroll in a credit counseling course. According to the Federal Trade Commission, the certificate of completion must be submitted with the application to file for bankruptcy. During the course, the counselor will discuss possible alternatives to declaring bankruptcy. Participants will look at the factors that led them to their current financial situation and discover ways in which they can prevent becoming indebted in the future.

It is also mandatory for people who file for Chapter 7 or Chapter 13 bankruptcy to complete a debtor education class, as reported by U.S. Courts. Otherwise referred to as a personal financial management course, this class concentrates on helping people get back on their feet after declaring bankruptcy. People will learn how to create a budget, and essentially live within their means. Debtors should get their completion certificate within 60 days of filing for Chapter 7 bankruptcy or before they make their final payment under a Chapter 13 reorganization plan.

While most everyone is required to complete the classes, people who are mentally disabled or in active military duty may be exempt. 

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