In Texas, people who want to file for personal bankruptcy must obtain bankruptcy certificates as a standard part of the process. A bankruptcy certificate is an official document that proves that you completed credit counseling and debtor education, two required steps in the personal bankruptcy process. You will not be able to complete your bankruptcy case until you obtain both of these certificates. The following describes what the certificates cover and when you must complete them.
Credit counseling
Before starting the bankruptcy filing process for Chapter 7 or Chapter 13, you must work with a nonprofit credit counseling agency to go through credit counseling and education. The counselor will go over your current debts, income and expenses while helping you figure out other potential options besides bankruptcy that could work for you. They may provide you with an informal repayment plan and tips to manage your debt better or confirm that no feasible options exist other than bankruptcy.
You must complete the course at most 180 days before you file for bankruptcy. When you finish the counseling, you will receive a completion certificate. Upon completing the bankruptcy filing, you will need this certificate to prove that you have completed the counseling before the court can approve a discharge of your debts.
Debtor education
After filing for personal bankruptcy, you must complete a debtor education course designed to help you understand how to manage your money and make more informed financial decisions in the future. The course teaches such skills as creating a budget, rebuilding credit and ways to manage debt so that you can have a fresh start on your financial journey after bankruptcy. You must complete the course to get a bankruptcy certificate and prove that you completed the coursework so that you can move forward with your personal bankruptcy filing.
Who issues bankruptcy certificates?
Only approved providers issue bankruptcy certificates. In most states, you can obtain valid certificates by completing credit counseling and debtor education courses through agencies approved by the U.S. Trustee Program. Individuals residing in Alabama and North Carolina must choose services approved by their state’s bankruptcy administrator. If you file a joint bankruptcy with a partner, you can complete the courses together but both of you will receive individual certificates for your completed counseling and coursework.
Some providers may file the certificates of completion with the bankruptcy court on your behalf, while others may provide the certificates to you for filing with the court.
Filing for bankruptcy can be an emotional and challenging decision. However, it can also relieve individuals from overwhelming debt and create a fresh start for a better financial future.