Before receiving a discharge in bankruptcy, debtors must first take a Debtor Education Course (or it’s equivalent) per 11 U.S.C. § 707(b). There are hundreds of Debtor Education providers out there for a variety of prices from free to $50.00. They can be in person, over the internet or telephone. People tend to go for the least expensive one just to get it over with, but I wanted to see what they might get out of such a course so I decided to take a couple of them myself.
A few weeks ago I went to Douglas W. Neway’s free debtor education course for Jacksonville’s Chapter 13 filers. This class was informative and gave debtors the opportunity to ask questions directly to the trustee’s staff, however it was mostly engineered to help debtors get through the Chapter 13 process rather than budget and survive life after the bankruptcy.
Dave Ramsey also provides debtor education. He’s energetic, intelligent and best of all, he’s been there. Back in the late 80’s Dave went through a bankruptcy and has made multiple millions since. His course covers every topic, negotiating purchases, insurance, home mortgage interest, car purchases, credit reports, etc. He even provides short comprehensive quizzes after each section.
The only thing I disagree with in Dave’s course is that he states in his conclusion, “Don’t rebuild your credit.” This is because he recommends that people live using cash only for transactions. Cash only is a good idea because you can never go into debt using this method, however without building credit you’ll never get a good mortgage rate either. His of not rebuilding credit would have people continuing to buy milk but never being able to finance the cow. I agree that cash is king, but the right mortgage rate on the right terms is better in the long term than paying rent each month because rent is lost as soon as it’s paid where an intelligently planned mortgage payment will build equity over time.
Overall, I’m inclined to suggest both courses for those in a Chapter 13 and Dave’s only for those in Chapter 7. The information Douglas Neway’s office provides is very valuable and accurate -it’s straight from the horses’ mouth. Dave’s course is also valuable, more so I think than the mere $25 he charges for it.
If you’re considering bankruptcy and would like to know your options in debtor education or any related matter, contact a Jacksonville Bankruptcy Attorney or call us at (904) 685-1200 for a free consultation.