The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) has mandated that a bankruptcy petitioner should take two counseling sessions before getting a bankruptcy petition discharged. The first counseling session which is a prepetition credit briefing should be taken before filing the bankruptcy petition. The second session known as predischarge financial management course is taken after filing the petition. Both the counseling sessions are required in chapter 7 as well as in chapter 13.
Subsequent to filing a bankruptcy petition, a debtor must attend a predischarge financial management course for the discharge of bankruptcy petition. Predischarge financial management course is the concluding step in a bankruptcy discharge.
A predischarge financial management course should be completed by a bankruptcy petitioner from an agency authorized by the Executive Office for U.S. Trustees (EOUST) to conduct financial management course. Below are links to authorized agencies in all 50 States[i]. A redischarge financial management course is of an instructional nature and will deal with financial literacy issues. The course provides instructions to manage personal finances after bankruptcy and provides bankruptcy petitioners with resources to:
- avoid future financial problems;
- prepare and pursue budgets;
- regain funds after bankruptcy; and
- recognize how to make use of credit prudently.
A predischarge financial management course can be taken anytime after a bankruptcy petition is filed but it should be within forty five days after the meeting of creditors (341 Meeting). If a predisacharge financial management course is not taken within the stipulated time, the bankruptcy case is closed without discharge.