Bankruptcy law generally requires each person who files bankruptcy receive a financial management course instruction in person, by phone, or over the Internet, in order to receive a discharge of debt in their case. If the course is not taken and a certificate of completion filed with the court, or an order waiving the requirement granted by the judge, the case will be closed without a discharge of debt.
The course must be taken after a bankruptcy case is filed, it is not taken prior to filing the case. It must be from by a course provider approved by the Office of the U.S. Trustee or the court’s Bankruptcy Administrator (for North Carolina and Alabama). A list of approved providers is available on the agency’s and the court’s website.
The courses are generally between 1 ½ hours to 3 hours long. The goal is to provide you with some assistance in preparing a household budget, avoiding and managing debt, and preparing a savings plan for the future.
If you have a power of attorney for another person, you can take the education course for that person so long as the power of attorney is legally sufficient to allow you to file a bankruptcy petition for them in the first place.
If you and your spouse filed a joint bankruptcy case, both must complete and file a certificate with the court.
Most course providers charge a fee for their services. They are required to waive or reduce the fee for low income people, particularly if your household income is 150% of less of the poverty level.
One rare exception to the education certificate requirement is where the U.S. Trustee of Bankruptcy Administrator certifies that sufficient providers are unavailable to meet the needs of a given district for a period of time. This may happen during or shortly after a natural disaster, for example.