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Pre-bankruptcy Counseling and Debtor’s Education

Pre-bankruptcy counseling session – Know the alternatives before taking the plunge Each person who seeks assistance of bankruptcy has a unique financial situation. According to the new rules, if you plan to file for bankruptcy, you must get credit counseling from a government-sponsored organization within 180 days before you file for it. As bankruptcy is a legal process, you have to make sure that you take the best steps in order to complete the process successfully. The Department of Justice’s US Trustee Program approves those organizations to offer the credit counseling and debtor education that is required for anyone who is filing personal bankruptcy. By law, the US Trustee Program doesn’t operate in Alabama and North Carolina and in these states, the court officials who are known as Bankruptcy administrators approve the pre-bankruptcy counseling organizations that offers credit counseling to the debtors who’ve filed for bankruptcy.

The educational and counseling requirements before filing bankruptcy Pre-discharge debtor education and pre-bankruptcy credit counseling might not be provided at the same time. According to the law, credit counseling should take place before you file for bankruptcy and debtor education should take place after you file. Only credit counseling organizations and debtor education course providers who have been approved by the US Trustee program should issue these certificates. Check out the details before you take the plunge.

Pre-bankruptcy counseling: A pre-bankruptcy counseling session with a credit counseling agency that is approved should include the assessment of your personal financial situation, discussion of the alternatives that could have helped you avoid bankruptcy and a personal budgeting plan through which you can get back a firm grip on your finances. A typical counseling session should last for at least 60-90 minutes and can take place either person to person or over phone. The counseling organization needs to offer this counseling session for free. You can even ask for a fee waiver from the counseling organization in case you can’t afford to pay the fees. Depending on where you live, you will generally be charged $50. Once you complete the required counseling session, you should get the certificate as a proof.

Postfiling debtor education: A debtor education course will be offered by an approved provider and this will usually entail developing a budget, managing money and teaching the techniques of wise credit card usage. The debtor education can take place in person, or online or through the phone. The education process might last longer than the pre-filing counseling requirements and the usual fee that is charged is within $50-$100. Once you complete the debtor education course, you should receive a certificate of proof as this will be checked henceforth. Therefore, when you’re on the verge of filing bankruptcy, ensure taking the right steps of going through the counseling or debtor education. Before choosing a credit counselor, make sure you choose the best organization that offers you some of the most worthy financial tips and bankruptcy alternatives. After you file for bankruptcy, you should take the required credit repair steps through which you can become creditworthy yet again.

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