What courses am I required to take when filing for bankruptcy in Kentucky?

There are two courses that any individual who is filing for bankruptcy in Kentucky will be required to take.

Filing for bankruptcy in Kentucky is a necessity for many people who are struggling with overwhelming debt. Through securing a Chapter 7 filing, certain types of debts may be discharged completely. In a Chapter 13 bankruptcy, the debtor develops a repayment plan that will typically reduce the amount of money owed and enable the person to keep certain assets.

In either case, the consumer will be expected to complete two courses: a credit counseling course and a debtor education course. Failure to do so can result in a rejected petition.

Credit counseling

Under the law, in the 180 days leading up to filing the petition for bankruptcy, a consumer must complete a credit counseling course. The course must be administered by an agency that has been approved by the U.S. Department of Justice.

During a credit counseling session, debtors have the chance to review their financial situation and determine if bankruptcy is the right option. The agent may discuss alternatives to bankruptcy that could apply to his or her case and help the person develop a budget to keep finances on track. According to the U.S. Federal Trade Commission, these sessions only last between 60 to 90 minutes. Further, they may take place over the phone, online or in person. There is a cost for the session, but the agency is expected to provide the counseling for free when someone cannot afford it.

Upon completion of the course, the debtor will receive a certificate. That certificate must be included in the petition for bankruptcy.

Debtor education

The debtor education class is also mandatory before debts will be discharged. After filing a petition for a Chapter 7 bankruptcy, the consumer must take this course within 60 days of the date set for the meeting of creditors. Someone who files a Chapter 13 petition must take the course before making the last payment associated with the repayment plan.

Debtor education courses are intended to do the following:

  • Teach people how to use credit wisely
  • Teach people how to manage money
  • Teach people how to develop a budget

Similar to a credit counseling course, a debtor education course must be provided through a government-approved agency. A list of agencies that meet the federal requirements can be found through the U.S. Department of Justice.

There are a number of other requirements associated with filing for bankruptcy in terms of what is expected of the consumer and when. States also set limits on what property may be exempted from bankruptcy proceedings. People who have concerns about this issue should speak with a bankruptcy attorney in Kentucky.