You file a bankruptcy, your debt is eliminated and now what? Being debt-free is a great thing and you want to rebuild your credit but maybe you don't know how? Post-bankruptcy brings credit cards and financing options but with higher interest rates. Creditors want you to be in debt - if you apply for one of these credit cards and get overwhelmed again, the safety net of a Chapter 7 bankruptcy is not an option again for eight years. It is easier said then done to create a budget and save money. Many people are not educated in handling finances and bankruptcy can eliminate the old debt but to manage future debt they need the tools to succeed.
When the bankruptcy laws changed in 2005, certification of credit counseling and debt management became mandatory for a case to filed and a case to be discharged. The debtor is required to spend time learning financial management to receive his certification. The credit counseling course focuses on reasons a person gets into debt and possible solutions. So, a person filing for a bankruptcy completes the course and can identify possible reasons as to how they got into debt in the first place. The debtor education course outlines short term and long term goals along with creating a budget so post-bankruptcy, the debtor has background in financial management.
The courses are important. The majority of bankruptcies are filed due to factors like divorce and medical problems. But, there are people who used credit and were possibly not educated in the ramifications of missed payments, high interest, etc. For a person who is overwhelmed by their debt, these courses can provide the tools for a better financial future.