Debtor education programs teach individuals about debt management and personal finance. They are available through non-profit agencies and credit consulting firms. In the US, those filing for bankruptcy must complete a two-stage educational program, including credit counseling and debtor education courses. Some debtors may also complete an educational program when working with a credit counselor or debt management company.
Debtor education programs provide information about debt, responsible credit management, and personal finance issues for individuals. Some programs are designed to help people understand how to properly manage debt so they can take control of their personal finances. In other cases, a debtor education program may be targeted specifically at individuals who are in bankruptcy or who are seeking help through a debt management plan. Courses are typically available through a variety of sources, including non-profit community service agencies and credit consulting firms. Depending on the laws of a specific jurisdiction, it may be possible to complete a debtor education course online, although in some places course participants must take the course in a traditional classroom setting.
In the United States, when an individual goes through bankruptcy, he or she is required to complete a two-stage educational program. In the first phase, the debtor must complete credit counseling with an approved credit counseling organization. During credit counseling, the debtor will discuss their situation with a counselor, who can present several options for dealing with the debt that do not include filing for bankruptcy. The counselor can also provide the debtor with basic information about budgeting and responsible use of credit.
If the debtor decides to declare bankruptcy, he or she will need to complete an education course before receiving a bankruptcy discharge. In cases where an individual files for Chapter 7 bankruptcy, he or she may complete debtor instruction shortly after filing a case. When a debtor files for Chapter 13 bankruptcy, he or she cannot complete the debtor’s education program until the end of his or her payment plan. Debtor education courses typically provide more in-depth information on money and debt management to help people make the most of their new start after bankruptcy. Federal law requires those filing for bankruptcy to take these courses through approved providers and provide a course completion certificate to the court in order to receive a discharge of their remaining debt.
Some debtors prefer to avoid bankruptcy and may instead work with a credit counselor or debt management company to come up with an alternative debt negotiation or repayment plan. In many cases, these organizations will still require the debtor to complete an educational program. The program can be the same as that offered to those going through bankruptcy, or it can reflect the philosophy of the organization providing the debtor education. In either case, debtors should inquire about course delivery methods, as many credit counselors now offer online programs that can be completed in the privacy of the student’s home.
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