Overview
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Summary
This page provides general information about the financial counseling
and education requirements for individuals filing bankruptcy and the Institute’s
related services.
Background
In 2005, Congress passed a massive overhaul of the bankruptcy
system. Attorneys and the individuals they represent are now faced with
more complicated technical and procedural requirements. Anyone considering
filing for bankruptcy should speak with a qualified attorney who can help
identify the legal effects, risks and benefits of filing.The information
below and on other pages is not intended to be legal advice.If any statement
about the law on this page is contradicted by any legal advice or information
given to you by an attorney, you should consider the attorney’s
legal advice or information to be more accurate.
Among the new requirements, individuals who file bankruptcy will have
to complete two additional tasks: Pre-Filing Counseling and Post-Filing
Debtor Education.The media and bankruptcy professionals sometimes refer
to these as “tickets in” and “tickets out.” Although
some individuals are not required to complete these requirements, the exceptions
are limited and you should speak with a qualified attorney if you have
questions.
Pre-Filing Counseling
An individual who is filing bankruptcy must first complete a briefing from
an approved agency during the 180 day period prior to filing with the
court.This pre-filing briefing is also commonly called “Pre-Filing
Counseling,” “Credit Counseling,” “Budget Counseling,” or “Budget
Briefing.” At the end of the Pre-Filing Counseling, the individual
receives a Certificate of Completion that proves to the bankruptcy court
that they completed the counseling on a specific date with an approved
agency.If a legally married couple is filing jointly (together), they
must both complete a Pre-Filing Counseling session and they must each
obtain a Certificate of Completion.
The Institute for Financial Literacy is approved to provide these Pre-Filing
Counseling sessions in all states, territories and judicial districts by
Internet and Telephone.In Maine, the Institute can also provide these sessions
in person at its offices in Portland.Please note that approval does not
endorse or assure the quality of an agency’s services.For more detailed
information about the Institute’s Pre-Filing Counseling services,
please click the Pre-Filing Counseling link above.
Post-Filing Debtor Education
After an individual
has filed bankruptcy, they must complete a Personal Financial Management
Instructional Course, also commonly called “Post-Filing Debtor Education,” “Debtor
Education” or “Debtor Ed,” from an approved provider.Individuals
who have filed under chapter 7 of the Bankruptcy Code must complete the
Post-Filing Debtor Education within 45 days of the date first scheduled
for their meeting of creditors, often referred to as a “341 hearing.”Individuals
who have filed under chapter 13 of the Bankruptcy Code must complete the
Post-Filing Debtor Education no later than either the date of their last
plan payment or their motion for discharge, whichever comes first. After
completing Post-Filing Debtor Education, the individual receives a Certificate
of Completion that proves to the bankruptcy court that they completed the
course on a specific date with an approved provider.If a legally married
couple filed jointly (together), they must both complete a Post-Filing
Debtor Education course and they must each obtain a Certificate of Completion.
The Institute for Financial Literacy is approved to provide these Post-Filing
Debtor Education courses in all states, territories and judicial districts
by Internet, Telephone and Home Study.In Maine, the Institute can also
provide these courses in person at its offices in Portland.Please note
that approval does not endorse or assure the quality of a provider’s
services.For specific information about the Institute’s bankruptcy
related Post-Filing Debtor Education services, please click the Post-Filing
Debtor Education link above.
Why Use the Institute?
All providers claim to put clients’ best interests
first. So what makes the Institute different?
We really are the experts. The Institute is a financial education organization
from start to finish.We set the National Standards for Adult Financial
Literacy Education.We maintain the Library of Personal Finance.We host
the Annual Conference on Financial Education.We also issue the Excellence
In Financial Literacy Education (“EIFLE”) awards and administer
the Center for Consumer Financial Research.All of these programs exemplify
our organizational philosophy and our mission: to make effective financial
literacy education available for all American adults.This is what we do,
and we do it well.
Our programs are proven effective. All providers will tell you that their
clients say they wish they had taken their program years earlier, that
they would recommend the provider to a friend, etc.We can tell you all
that too, but we’d rather point out that objective test scores show
our programs improve clients’ understanding of personal finance by
over 20% on average.
We are neutral and unbiased. We don’t sell debt management programs,
debt settlement programs or financial services or products of any type.This
means we can give clients information, advice and feedback that is in their
best interest, not ours.
We support clients after they finish the program.Every client who completes
our Post-Filing Debtor Education course receives a quarterly newsletter
for one year, which offers ongoing money management tips, encourages the
client to use what they’ve learned and keep control over their finances.Clients
are also encouraged to call the Institute with follow up questions they
may have as they begin working to rebuild their financial picture.Every
Post-Filing Debtor Education household gets a workbook (even internet and
telephone clients!) so they can use it long after they’ve hung up
the phone or lost their password.
We are convenient.The Institute has the widest variety of delivery methods
available (telephone, internet and homestudy), so clients can receive their
counseling and education in the way that is most comfortable and convenient
for them.
We want clients to keep learning.We want our clients to take the attitude
that learning about their money is a life long process, and doesn’t
end with getting their certificate. The range of available financial products
and services changed drastically between 1960 and 2000, and it will change
again by 2040.Whether clients use the Institute’s other financial
educational courses, their local adult education program, or educate themselves
at the local book store, we want them to keep expanding their knowledge
so they are prepared for each phase of their financial lives.
Pro Bono Services
All agencies and providers approved by the EOUST and
Bankruptcy Administrators are required to provide services without regard
to the client’s
ability to pay.The Institute is committed to ensuring that the counseling
and education requirements do not create an obstacle to individuals in
need of bankruptcy protection. The Institute meets this commitment
by:
- seeking out partnerships with legal aid organizations and individual
pro bono providers
- automatically waiving service fees for clients of these
legal aid organizations and pro bono providers
- waiving service fees for
clients whose attorney certifies they have waived their legal fee in
whole or in part
- waiving service fees upon request for clients whose documented
gross income is less than 150% of the federal poverty line
- reviewing requests
for service fee waivers under other circumstances on a case by case basis
- treating all clients with respect and providing quality service regardless
of payment status
Legal services organizations and their supporters are encouraged to contact
the Institute to discuss the available partnership options. If you have
any further questions about fee waivers, please call our offices toll free
at 866-662-4932 during normal business hours.
Normal Business Hours
Get Started
Learn how to sign up for the Institute’s bankruptcy related services
and what information you need to get started.
Bankruptcy FAQ
Frequently Asked Questions about the financial counseling and educational
requirements for individuals filing bankruptcy and the Institute’s
Bankruptcy Related Services.
Forms
A complete list of forms related to the Institute’s bankruptcy related
services.