While the decision to declare a chapter 7 bankruptcy may have been a difficult one to make, you have made the first step toward getting your financial affairs straightened out and making a fresh start. It could be helpful to understand a couple of hoops that you must jump through as part of your filing, which involves some educational requirements. These two classes are not optional; one must be completed before you file, and the other must be completed before your bankruptcy becomes final. Read on to learn more.

Why am I having to take these two classes?

In an effort to cut down on consumers who file bankruptcy repeatedly, the Bankruptcy Abuse Prevention and Consumer Protection Act was created. This act, among other things, set out some guidelines for helping consumers do a better job with their finances in the future. Additionally, one of the classes sought to prevent those who had the financial means to pay their bills from filing a chapter 7 bankruptcy.

Credit Counseling Class

The first of two classes is more of vetting method to prevent filers with enough income to cover their bills from filing. You must submit a "budget" as part of the class, and this budget is evaluated by a certified credit counseling agency. You must list all of your bills (pre-bankruptcy) and all of your income in this budget, and if the agency finds that you do have enough funds to meet your financial obligations without declaring bankruptcy, you may be prevented from filing.

If that happens, you will have the opportunity to appeal that decision by providing proof that you really don't have the means to pay your bills. For example, you may be able to show that escalating interest rates on a loan balance could eventually ruin your budget. This class needs to be taken before you file, and it can occur up to 180 days prior to filing.

The Personal Finance Class

After you have been cleared to file bankruptcy, you must take the personal finance class within 45 days of your creditor's meeting. This class provides help and support in changing your bad financial habits to good ones. It will cover subjects like creating emergency savings accounts, budgeting, using credit wisely and more. This class can be taken in person, online, or by mail, and you must choose a provider from the list of approved agencies.

To learn more about these educational classes, speak with a bankruptcy attorney like Lazaro Carvajal.