The second bankruptcy course is the personal financial management instructional course, a post-filing class every individual debtor must complete before the court will enter a discharge. It runs a minimum of two hours, has to be taken through a provider approved by the U.S. Trustee Program, and applies whether you filed under Chapter 7, Chapter 13, or as an individual Chapter 11 debtor.1Office of the Law Revision Counsel. 11 USC 727 – Discharge2Office of the Law Revision Counsel. 11 USC 1328 – Discharge Skip it, or file the certificate late, and your case closes without wiping out a single debt.
When You Have to Finish It
The deadline depends on your chapter.
If you filed Chapter 7, you must file proof of completion within 60 days after the first date set for the meeting of creditors (the 341 meeting).3Cornell Law School. Federal Rules of Bankruptcy Procedure Rule 1007 Chapter 7 cases move quickly, so that window closes faster than most people expect. Finishing the course within a couple of weeks of your 341 meeting leaves a comfortable cushion.
If you filed Chapter 13, you have until the date you make your final plan payment, or the date you file a motion for a hardship discharge, whichever applies.3Cornell Law School. Federal Rules of Bankruptcy Procedure Rule 1007 Plans run three to five years, so most Chapter 13 debtors take the course near the end. Don’t push it to the final day. A certificate that arrives late can hold up a discharge you spent years earning.
What Happens If You Miss the Deadline
The court closes your case without entering a discharge. You went through the filing, the 341 meeting, any asset surrender, and in Chapter 13 the years of payments, and you still owe every dollar. The debts remain legally enforceable.
It is fixable. You file a motion to reopen the case, pay the reopening fee ($245 for Chapter 7, $235 for Chapter 13), complete the course if you haven’t already, file the certificate, and wait for the discharge order.4United States Courts. Bankruptcy Court Miscellaneous Fee Schedule Courts can waive the reopening fee in appropriate cases but often don’t. There is no hard statutory deadline for reopening, but judges have broad discretion, and the longer you wait, the more they tend to want an explanation.
Finding an Approved Provider
Only providers approved by the U.S. Trustee Program can issue a valid certificate.5United States Courts. Credit Counseling and Debtor Education Courses A certificate from any other source is worthless for your case, so confirm approval status before you pay anyone.
The Department of Justice publishes a searchable list of approved providers, filterable by state, delivery method, and language.6United States Department of Justice. List of Approved Providers of Personal Financial Management Instructional Courses Spanish and several other languages are available. If the language you need is not in the dropdown, the Debtor Education Unit can help at ust.de.help@usdoj.gov.
You can take the course in person, by phone, or online.7United States Department of Justice. Credit Counseling and Debtor Education Information Online is the most common choice and lets you finish in a single sitting on your own schedule.
Before you start, have your bankruptcy case number, your judicial district, and your Social Security number in front of you. The provider ties the certificate to those details, and errors can invalidate it or delay filing.
What It Costs
Course fees generally run between $10 and $50. Federal law requires approved providers to charge a reasonable fee and to serve debtors regardless of ability to pay.8Office of the Law Revision Counsel. 11 USC 111 – Nonprofit Budget and Credit Counseling Agencies; Financial Management Instructional Courses In practice, that means a fee waiver or reduced rate if your household income is below 150 percent of the federal poverty guidelines. The provider will ask about income and household size at enrollment to see if you qualify.
What the Course Covers
The session must last at least two hours regardless of delivery method, and every approved provider has to cover five topic areas set by federal regulation:9U.S. Trustee Program. Frequently Asked Questions – Debtor Education
- Budget development: setting goals, calculating net monthly income, and sorting expenses as fixed, variable, or periodic.
- Money management: recordkeeping, separating wants from needs, keeping insurance in place, and building an emergency fund.
- Credit use: understanding the types and costs of credit, recognizing excessive debt, and reading your credit report.
- Consumer protection: knowing which laws govern credit report corrections and fraud, and where to go for help.
- Financial emergencies: alternatives to borrowing when something unexpected hits, and where to find assistance.
Quality varies. Some providers march through the material as a checklist; others give you worksheets and planning tools you’ll actually use. If you have the choice, pick one with strong reviews. The budgeting section in particular is more useful than most people expect, because it forces you to map out realistic post-bankruptcy finances.
Filing the Certificate
When you finish, the provider issues a certificate with a unique number. Many providers notify the court electronically on your behalf, and when they do, you don’t need to file anything yourself.10United States Courts. Official Form 423 – Certification About a Financial Management Course Confirm this with your provider, because the responsibility is still yours if they don’t.
If the provider does not notify the court, you file Official Form 423 yourself. The form asks for the completion date, the provider’s name, and the certificate number. File it through the court’s electronic filing system or mail it to the clerk of the bankruptcy court where your case is pending. Chapter 7 debtors should get this done within the same 60-day window that applies to course completion.
Joint filers can attend the same session, but the provider must issue a separate certificate to each spouse, and each spouse files a separate Form 423.9U.S. Trustee Program. Frequently Asked Questions – Debtor Education The court will not discharge either debtor until both certificates are on the docket.
Who Can Skip the Course
Very few debtors qualify for a waiver, but the categories are worth knowing. A court may excuse the course if you are mentally incapacitated to the point of being unable to make rational financial decisions, or so physically impaired that you cannot participate by any delivery method, including phone or online. Active-duty service members in a combat zone can also request an exemption. In every case you have to file a motion asking for the waiver, and the judge decides. If granted, you don’t need to file Form 423; the docket reflects the waiver and the case moves toward discharge.