Debtor education course

How does the debtor education course work?

It is separate from credit counseling. Counseling comes before filing, debtor education comes after, and the two cannot be provided at the same time. 3 2

In Chapter 7 the court denies the discharge if the course was not completed after filing, and in Chapter 13 the court cannot grant the discharge until it is done. Limited exceptions cover debtors who are disabled, incapacitated or on active military duty in a combat zone, and districts where approved courses are found inadequate. 1 4 5

The course lasts at least two hours, and only approved providers may issue the certificate: the U.S. Trustee Program approves them in most of the country, and bankruptcy administrators do in Alabama and North Carolina. 6 3

Under the U.S. Trustee Program's guidance (FAQ pages updated January 15, 2025), a fee of $50 or less is presumed reasonable, and providers must give the course and the certificate regardless of ability to pay. 7

Unless the provider has already notified the court, the debtor files the certificate of completion: in Chapter 7 within 60 days after the first date set for the meeting of creditors, and in Chapter 13 no later than the last plan payment. The old Form 423 was abrogated effective December 1, 2024. 8 9