The debtor education course -- also called the "financial management course" or "second certificate" -- is a separate requirement from the pre-filing credit counseling. While credit counseling focuses on evaluating your financial situation before filing, debtor education is designed to help you manage your finances after bankruptcy so you can avoid future financial distress.
This course is required under 11 U.S.C. Section 111 and must be completed after your case is filed but before the court will grant your discharge.
How It Differs from Credit Counseling
Many filers confuse the two required courses. They are different in purpose, timing, and content:
| Feature | Credit Counseling (Course 1) | Debtor Education (Course 2) |
|---|---|---|
| Purpose | Evaluate alternatives to bankruptcy | Teach financial management skills |
| Timing | Before filing | After filing |
| Content | Budget review, debt options | Budgeting, credit use, money management |
| Statute | 11 U.S.C. Section 109(h) | 11 U.S.C. Section 111 |
| Consequence | Case dismissed if missing | Discharge withheld if missing |
What the Course Covers
The debtor education course is a forward-looking educational program. It covers practical skills for managing your finances after bankruptcy:
- Budgeting: How to create and maintain a realistic household budget, track income and expenses, and plan for irregular costs like car repairs or medical bills.
- Using credit responsibly: How credit works, understanding interest rates and fees, rebuilding credit after bankruptcy, and recognizing predatory lending practices.
- Financial goal setting: Setting short-term and long-term financial goals, building an emergency fund, and planning for major expenses.
- Consumer protection: Your rights as a consumer, how to spot scams, and resources available for financial difficulties in the future.
- Money management: Practical strategies for managing day-to-day finances, reducing unnecessary expenses, and increasing savings.
The course typically takes 60 to 120 minutes and costs between $15 and $50. Like credit counseling, it can be completed online, by phone, or in person.
When to Complete It
The timing depends on which chapter you are filing under:
Chapter 7
In a Chapter 7 case, the discharge is typically entered about 60-90 days after the 341 Meeting of Creditors. You should complete the debtor education course promptly after filing -- ideally within 45 days of your 341 Meeting. If the court does not receive your certificate before the discharge deadline, it may close your case without entering a discharge.
Chapter 13
In a Chapter 13 case, the discharge is not entered until after you complete all payments under your plan (typically 3-5 years). You must file your debtor education certificate before the discharge can be entered. Many Chapter 13 filers complete the course early in the case to get it out of the way, even though the discharge is years away. This is a good approach -- there is no reason to wait.
Chapter 11 and Chapter 12
Individual Chapter 11 and Chapter 12 debtors must also complete the debtor education course before discharge. The timing follows a similar pattern to Chapter 13 -- complete it whenever convenient after filing, but before requesting your discharge.
The Certificate
Upon completing the debtor education course, the provider issues a certificate of completion. This certificate is filed with the bankruptcy court, typically as Official Form 423 ("Certification About a Financial Management Course"). Your attorney files this form, or you file it yourself if you are proceeding pro se.
The certificate confirms that you completed an instructional course in personal financial management from an approved provider. It includes the provider's name, the date you completed the course, and your case number.
Cost and Fee Waivers
The debtor education course typically costs $15-50. Many providers offer a discount when you bundle both required courses (credit counseling and debtor education) at the time you take the first course. Bundled pricing usually runs $30-75 for both.
Fee waivers are available for filers who cannot afford the cost. Approved providers are required to offer services regardless of ability to pay. If cost is a concern, ask the provider about waivers or reduced fees before starting the course.
For a full breakdown of all bankruptcy costs, see voluntarypetition.org.
Joint Filers
If you filed a joint petition with your spouse, both of you must complete the debtor education course and both must file separate certificates. You may take the course together, but each person receives their own certificate.
Finding an Approved Provider
The U.S. Trustee Program maintains a separate list of approved debtor education providers. This list is different from the credit counseling list. Search for approved providers by state at justice.gov.
For tips on choosing a provider and avoiding scams, see Approved Credit Counseling Providers.