If you’re considering bankruptcy as a way to address your financial problems, it’s important to know that credit counseling is a necessary step in the process. This requirement, set by federal law, plays a crucial role in helping individuals make informed decisions about their financial future.
What is Credit Counseling?
Credit counseling is a comprehensive review of your financial situation conducted by a certified counselor.
To accommodate various needs and schedules, you can complete credit counseling through:
- In-person sessions
- Phone consultations
- Online courses
Typically, a credit counseling session lasts about 60-90 minutes. During this time, you can expect to:
- Review your income, expenses, and debts
- Discuss your financial goals
- Explore potential solutions to your financial challenges
You must complete credit counseling within 180 days before filing for bankruptcy. Upon completion, you’ll receive a certificate that must be filed with your bankruptcy petition.
Why is Credit Counseling Mandatory?
The US bankruptcy code requires everyone filing for bankruptcy to complete a credit counseling course. The requirement for credit counseling serves several crucial purposes:
- Informed Decision-Making: It ensures that individuals fully understand their financial situation before proceeding with bankruptcy.
- Exploration of Alternatives: Sometimes, a credit counselor can identify viable alternatives to bankruptcy.
- Financial Education: The process provides valuable insights into managing finances, which can be beneficial regardless of whether you proceed with bankruptcy.
Beyond Credit Counseling: Debtor Education
In addition to pre-filing credit counseling, you’ll also need to complete a debtor education course after filing for bankruptcy. This course focuses on financial management skills to help you successfully navigate your post-bankruptcy financial life.
How We Can Assist You
At Brock and Stout, we understand that the bankruptcy process can seem overwhelming. Our experienced bankruptcy attorneys are here to guide you through every step, including credit counseling. We can:
- Recommend approved credit counseling agencies
- Help you understand the insights gained from your counseling session
- Assist in incorporating the counseling certificate into your bankruptcy filing
Contact our office if you’re considering bankruptcy and have questions about credit counseling or any other aspect of the process. We’re here to provide the expert guidance and support you need during this challenging time.