Debtor Education/Personal Financial Management Course Explained

What Is the Debtor Education (Personal Financial Management) Course?

When you file Chapter 7 bankruptcy, you’re required to complete two educational courses, one before you file your case and one after you file.

1️⃣ The first course is a credit counseling course that covers your debt relief options.

2️⃣ The second course is a financial management (also called debtor education) course, and it covers topics that help you make the most of your fresh start, like budgeting and managing your finances.

All bankruptcy filers must take this course. You won't get your bankruptcy discharge until you take the course and submit the certificate of completion to the court.

✨ If you use Upsolve's free tool to file your Chapter 7 case, you'll get help preparing your forms and reminders about when to take each course.

What Does the Debtor Education/Personal Financial Management Course Cover?

Although courses vary somewhat from district to district, most cover:

• ✅ How to prepare and manage a budget

• ✅ How to manage money and credit wisely

• ✅ How to understand consumer protection laws

• ✅ How to prepare for and handle an unexpected financial crisis

You will likely learn at least a few useful tips from the course to help you repair and rebuild your personal finances. 

How Long Does Course 2 Take & What Does It Cost?

The financial management course takes 1–2 hours to complete. 

If you live in a remote location, have a disability, or do not have reliable transportation, you can generally fulfill the debtor education requirement via an online course or over the phone, as well as in person. Most people complete the course online or via phone. As long as the servicer is an approved provider, your physical location when taking the course is irrelevant.

The course costs $10–$50, depending on which provider you use. Most course providers offer filing fee waivers for low-income filers.

When Do You Take the Second Course?

You can take the debtor education course any time after you file your bankruptcy case. 

⏱️ But you must finish the course and submit your certificate of completion to the court within 60 days of your scheduled 341 meeting.

The 341 meeting is also called the meeting of creditors. It’s a short meeting that’s run by your bankruptcy trustee to verify the information in your bankruptcy paperwork. You’ll get the meeting date on a court notice after you file your case.

📅 It’s a good idea to understand the bankruptcy timeline and mark important dates on your calendar. If you miss meetings or important deadlines, your case can be dismissed.

What if I Forgot To Take the Course — Do I Have To Start Over?

If you forget to take the course or miss the deadline, your case could be closed without a discharge. That means your debts won’t be wiped out, and creditors can start collecting from you again. 

The good news is, you may not have to start over from scratch. You can file a motion asking the court to reopen your case so you can submit the course certificate. If the court approves, you’ll have to pay a reopening fee, but you may still receive your discharge once everything is filed correctly.

You can contact your court clerk to ask how to file a motion and get information on the general process. It’s usually as simple as filing paperwork.

How Do You Find an Approved Course Provider?

Every state has a list of approved debtor education providers, categorized by district. You must take a course through an approved provider, or it won't be accepted by the court, and you’ll have to take it a second time.

⚠️ This works a little differently if you live in North Carolina or Alabama. In those states, the Bankruptcy Administrator for your district approves the course providers.

How Do You Submit the Debtor Education Certificate to the Court?

Once you complete the debtor education course, the provider will give you a certificate of completion. You’ll need to file this certificate with the bankruptcy court before you can receive your discharge. Some course providers will file the certificate for you, especially if you took the course online, but others won’t — so it’s important to check.

In most cases, you’ll also need to submit Official Form 423, also called Certification About a Financial Management Course. Some providers may file this form along with your certificate electronically. If not, you’ll need to take care of it yourself.

There are a few ways to file these documents with the court:

• 💻 Online: Some courts let you file through their electronic system. Check your court’s website to see if this is an option.

• 🚶 In person: You can bring the documents to the clerk’s office at your bankruptcy court.

• 📫 By mail: You can mail everything to the court. Be sure to include your case number on all documents.

If you’re not sure what your court requires, check its website or call the clerk’s office for help. It’s also a good idea to confirm that both the certificate and Form 423 were received and added to your case file. 

Once that’s done, you’ll be on track to receive your discharge. Congrats!

Is the Debtor Education Course Different From the Credit Counseling Course?

Yes.

You're required to take two courses when you file bankruptcy. The credit counseling course helps you understand all your debt relief options so you can decide whether bankruptcy is the best choice for you.

You must take this course before you file your bankruptcy case with the court. You'll need to include the certificate of completion with your other bankruptcy forms when you file.

Can You Use the Same Provider for Both Courses?

Yes, and many people do. Some approved providers offer discounts if you take both of the required courses with them. 

How Does the Debtor Education Course Work in Chapter 13 Bankruptcy?

Chapter 13 is the second most common type of consumer bankruptcy. It has many of the same requirements as Chapter 7, but it takes much longer because there is a required 3–5-year repayment plan.

In Chapter 13 bankruptcy, the certificate of completion should be filed before you have made your final plan payment, so there is no delay in getting your Chapter 13 discharge.