Bankruptcy Counseling vs. Debtor Education
When a person files for bankruptcy under the bankruptcy code, he/she is required to participate in a pre-bankruptcy counseling course called credit counseling. After a bankruptcy has been filed, the person must then go through a course called debtor education to prove to the bankruptcy court that he/she is committed and has the proper financial education to turn it all around and not end up in the same mess in the future.
Oftentimes, when filing for bankruptcy, your bankruptcy attorney will recommend a certain company or non-profit organization to put you through these courses. In some cases, it may be appropriate to go with the advice of your attorney and take the bankruptcy counseling course through the recommended third party company. However, there are often drawbacks to this.
Some things you may want to consider before simply agreeing with your attorney are:
1. Determine the actual price you are paying for the class. The price may be all wrapped up in a bundle with your attorney fees, but ask the firm where each dollar is being allocated so that you can price check the amount you’re spending on the classes with other firms that offer the same course.
2. Does your attorney receive a commission from the company he is referring people to? If this is the case, that company may be inflating your costs to make up for the commission it is offering the attorney.
3. You’ll want to determine if the class is taken online or in person. For convenience purposes, most firms offer an online course. However, you may prefer a certain course medium and if the organization your lawyer refers to doesn’t support one of these, you may want to consider searching for another one that does.
You may be asking yourself, “Is it really that big of a deal which company I choose?” These courses will in no way be the most expensive part of your bankruptcy process. However, when a person is going through bankruptcy, it is assumed that there is little money to go around. Otherwise, they would not be filing in the first place. $10 can be a huge deal when it means the difference between having and not having food on the table.