You are considering bankruptcy and are interested in understanding whether you qualify for a free pre-bankruptcy credit counseling course as
defined by the US government.
I added the language below.
Your natural next question is,"What are the poverty guidelines for your state, and how is household income calculated?"
Poverty guidelines change, and it can be challenging to understand how your annual household income can be calculated, so we created the free Credit Counseling Course Qualification Estimator below.
No personal information, such as email or phone number, is required, and it takes 2-3 minutes to complete. Below the calculator, I will describe three caveats to consider.
What's Next If the Calculator States I "May Qualify"?
If you used the above calculator and it said you may qualify for the free bankruptcy credit counseling course. Here's the 3-step process.
1. Choose an approved credit counseling agency
All credit counseling and debtor education course providers approved by the U.S. Trustee Program (USTP) are required to offer services free or at a reduced rate based on a person's ability to pay (
source).
The above calculator already understands which state and which are approved, but if it's helpful, please see the list of approved credit counseling course providers in your state:
Once you select an agency, check out step #2.
2. Fill out the fee waiver before starting the course
Once you select an agency, ou will want to request their fee waiver process. This can include the agency asking for your proof of income and household size.
You may have to provide the following information:
- Recent pay stubs, W-2s, or tax returns
- Social security, unemployment or disability benefit letters (if applicable)
- Documents showing household size, such as the latest tax return or dependent claims.
Each agency may have slightly different requirements, so it may be best to check its disclosures page before applying.
3. Complete the course and get a certificate
Once your fee waiver has been approved, then you may start the course. It may be difficult to get a refund if you've already paid for the course.
For the fee waiver, you may get a waiver code or written confirmation that the fee has been waived.
Once you've taken and completed the course, you may receive a certificate of completion which is the required document to file with your bankruptcy petition. Here's a picture of an actual redacted copy of a certificate of credit counseling.
Pre-Bankruptcy Course Caveats
If you are unable to qualify for a free pre-bankruptcy credit counseling course, please be aware of the following as you look for the cheapest US government-approved credit counseling courses.
1. Understand Up Charges Before Purchase
When I was researching pre-bankruptcy credit counseling courses, I was alarmed that non-profit organizations were actually upcharging for their services.
For example, I believe one company actually upcharged for a similar online certificate fee or video course fee, which is a bit shocking, as it didn't seem to provide any other option than to be upcharged.
When the total bill came, the course appeared to be around $50.00, even though the marketing made it seem that the course was between $15-$25, if I remember correctly.
In the calculator above, I tried to account for that by providing only the cheapest courses with the cheapest all-in fee.
2. Understand How The Course Is Offered
Some non-profits may only offer a telephone option, while others may only offer an online course option.
There are generally four different ways you can take the pre-bankruptcy credit counseling course, including:
- Online - These are often self-paced via a web portal that is available 24/7. In addition, you can often instantly get your certificate after completion.
- Phone - These are often counselor-led over the phone. You may need to schedule a call, and the certificate could be issued after the call.
- In Person - Offered at a local agency's office. This may be the least preferred option, and you might get it after you end the session.
- Mail/Paper - The mail and paper option would be where you fill out a packet and return it via mail. This would be a minimal option, and you'd get your certificate after the counselor's review.
If your preference is an online course, confirm that the credit counseling course provider you are considering offers that option.
3. Understand State Requirements
Alabama and North Carolina are unique in that they have a separate website listing the approved credit counseling and debtor education course providers.
The above calculator already understands which state and which are approved, but if it's helpful, please see the list of approved credit counseling course providers in your state:
Once you are done with the course, make sure you get your certificate, which you can utilize in your bankruptcy petition packet.
Conclusion
Hopefully, you understand whether you qualify for a free pre-bankruptcy credit counseling course and, if not, which is the cheapest pre-bankruptcy course option.
In addition, you now understand such things as whether a non-profit credit counseling course may upcharge you for certain features, how the course can be offered, and also state requirements for states such as North Carolina and Alabama.
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