Credit Counseling Before And During The Bankruptcy Process
There is more to applying for Bankruptcy than just filling in the forms. Individuals must undertake credit counseling from an approved credit counseling agency during the 180 day period prior to filing their petition. The counseling may be in either a group or individual setting and if a debt management plan is developed it must be filed with the court when all other documents are filed.
Counseling is normally provided by a nonprofit budget and credit counseling service. This requirement may be waived under certain circumstances, for example, when lack of appropriate financial counselors are available. The U.S. trustee (or bankruptcy administrator) will determine if a waiver is appropriate.
The counseling process does not stop there. For people seeking bankruptcy relief through Chapter 7 or 13, you’ll need to complete an instructional course in personal financial management. If is important if your financial difficulties are caused through consumer credit spending.
A debtor will not be discharged from bankruptcy unless a certificate of credit counseling and a copy of any debt repayment plan developed through credit counseling is presented to the trustee or administrator. The provision of counseling is made to educate debtors in the hope that future problems do not arise. Credit counseling will include strategies for budgeting and managing money.
If you are facing financial difficulties and feel that bankruptcy may be your only option, talk to a bankruptcy professional as soon as possible. At the very least, seek out a financial counseling service – remember, you may not be able to seek relief through the bankruptcy process unless you have completed this counseling. Don’t leave everything to the last minute – it will delay the process at a time when you don’t need delays.
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