Filing for Chapter 13 bankruptcy is one of the ways a person can reclaim their financial future if they’re overwhelmed by debt. This type of bankruptcy is informally known as a wage earner’s bankruptcy because it requires periodic payments to the bankruptcy trustee to pay off at least part of the debts the person owes.
When a person opts to file a Chapter 13 bankruptcy, they have specific requirements that they must meet on top of making the payments. Filers have to go through credit counseling and they have to take a debtor education course.
1. Credit counseling
Credit counseling has to occur before the case can be filed. These sessions typically last 60 to 90 minutes, during which bankruptcy alternatives are explored. In order for the credit counseling session to qualify for the person to file for bankruptcy, it must be approved by the U.S. Trustee Program. Once it’s done, a certificate of completion is issued, which will enable the person to file.
2. Debtor education course
Debtor education is a post-filing financial management course that teaches individuals how to budget, save and use credit responsibly. This must be done before the bankruptcy is discharged. It must also be completed with an approved company.
Chapter 13 bankruptcy can be an important step in rebuilding a person’s financial future. Getting control of their debts can be beneficial, but they must ensure they understand the requirements they must meet to go through the bankruptcy successfully. It may benefit them to work with someone who’s familiar with bankruptcy cases.