What You Should Know Before Filing Bankruptcy


If you are planning to file bankruptcy and want to file a bankruptcy application then you should get credit counseling from an agency that is approved by the government within 180 days of the date that you plan to file.Additionally, you need to be successful in completing an educational course for debtors before being removed.

Debtor Educators and Approved Credit Counselors

The U.S. TrusteeProgram of the Dept.of Justice allows groups to provide credit counseling and educational services to individuals who file for bankruptcy BKHQ on their own.Only the teachers and counselors who are listed included on the U.S.Trustee Program’s list are eligible to claim they are licensed to provide advice and support for those who are in debt.According to the law, in the USA In Alabama and North Carolina, the TrusteeProgram does not exist; instead, judges known as Bankruptcy Administrators have the ability to authorize pre-bankruptcy credit counseling organizations and firms that give debtors training to prepare them for the discharge.

Requirements for Counseling and Education

Credit counseling and debtor education cannot be provided concurrently prior to filing for bankruptcy. Credit counseling is mandatory before filing for bankruptcy.Education for debtors must occur after you file.

You have to provide the certification of credit counseling prior to submitting an application for bankruptcy.Also, you must provide evidence of your completion of debt counseling after bankruptcy filing, but prior to the debts being paid off.Only credit counseling and debtor education institutes approved by the US government are eligible. These certificates may be issued by the TrusteeProgram.To guard against fraud, these certificates are issued with a digit and issued via an automatic centralization system.

Counseling before bankruptcy

A pre-bankruptcy consultation that is facilitated by a reliable credit counseling service will provide an exhaustive analysis of your current financial situation, a thorough analysis of bankruptcy alternatives, and a customized budget plan.The typical session is between 60 and 90 minutes.The session may be conducted in person, via telephone, or even on the internet.The counseling firm must provide counseling at no cost to people who are in financial difficulty.If you’re unable to afford credit counseling, it’s recommended to seek an agreement to reduce fees from the company which you’re seeking for counseling before the start of the counseling session.If you refuse the offer, you could receive a charge for the counseling.The average cost is about 50usd, based on the area you reside in, the kind of service you are able to avail as well as other factors.Counselors should be able to discuss the fees in advance before beginning an appointment with a counselor.

After you’ve finished the requisite counseling, you’ll need to obtain an official certification to confirm that you’ve done so.Credit counseling firms aren’t required to charge additional fees for the certification.

Debtor Education After Filing

A licensed firm’s debtor’s education program will include assistance in budgeting, managing finances, and utilizing credit responsibly.As with pre-filing, or the debtor’s educational program, it can be conducted in person, over the telephone, or even on the internet.The instructional session may last longer than the two-hour pre-filing counseling session.Costs can range from $50 up to $100.Similar to filing a pre-filing application in the event that you are unable to pay the cost of the course, you can ask the teacher who is in debt to lower the cost.There is a list of approved institutions of debtor-education establishments on the internet, or at an office of the bankruptcy court in the district, you reside.

After you’ve completed the debtor education course, you’ll be given proof of completion that shows you’ve finished it.The certificate you receive differs from the one you had previously received when you sought credit counseling.If the organization that provides the debtor’s education could not verify that there was any charge for the certification prior to the start of the session there is no need to charge an additional fee.

Credit Counseling Services

If you need credit counseling to meet the legal criteria of bankruptcy, be sure you acquire it from an approved firm in your judicial district.On the internet or at the bankruptcy clerk’s office in the district where you want to file bankruptcy, you may find a list of recognized credit counseling services. After the list of approved businesses is full, you may contact each one for further information before choosing one.The most important things to ask are:

  • What types of services can you offer?
  • Do you have the ability to help me in developing a plan to avoid problems in the near the near
  • What is the cost?
  • How do I proceed if not able to afford your services?
  • What qualifications do your counselors have? Are they certified or accredited by a third-party organization? What kind of instruction did you receive?
  • What could you do to keep my personal information of myself (including my post office box address and financial details, my phone number) safe and secure?
  • What is the salary employees earn?Are they compensated more when I sign up for particular services, pay a charge, or contribute to your company?

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