Credit counseling for bankruptcy is required by those who intend to take filing of bankruptcy as a way forward for their financial problems. All people who plan to file for bankruptcy protection are required to get a credit counseling session from an approved organization within 180 days of filing. Only the counselors and institutions that appear on US Trustee Program are permitted to provide the counseling. Also known as pre bankruptcy counseling, it entails an in-depth evaluation of your financial conditions.
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The session of credit counseling course for bankruptcy generally lasts for 60 – 90 minutes and during this time the counselor will provide a broad overview of the federal bankruptcy law, develop a snapshot of your current financial condition and help you to determine if there are any alternatives, to filing a bankruptcy, that enable you to reduce your debts in reasonable time and at the same time manage a balanced budget.
The overall thrust is to get you started on building a sound financial plan for your future. The sessions can be organized as per the convenience of the user. These can be done face-to-face, over a call or can be arranged as online credit counseling for bankruptcy.
A credit counseling certificate for bankruptcy is issued at the end of the session. The certificate can be emailed to you and also can be faxed to your attorney as applicable.
It is very important to be open and frank during the session to ensure that the counselor provides you with the right alternatives and directions to your financial problems. Before you plan to start the session, it will be helpful to collate the information pertaining to the tax returns that had been filed in the previous year, information on the assets like statement of savings account, mutual funds, stocks, retirement assets and details of the income sources and expense accounts. It will also be good to take stock of unsecured loan statements, statements for each and every credit card, foreclosure notices, medical bills etc.
Some of the questions that might come up during the session and should be considered are as follows:
1. Who all are your creditors?
2. How much money you owe to each creditor?
3. How long have you owed money to your creditors?
4. When did you make the last payment to each individual creditor?
5. Problems that you foresee with any of the creditors.
6. How much income are you currently getting?
7. Where all do you get your income from and what is the nature of the income?
8. Is there an agreement of a trade-off or settlement with any of your creditors?
The sessions can be quite useful as the professionals have experienced such situation before. While it might look daunting to you, the counselor can come out with multiple alternatives some of which you might not have even heard or thought of. At the end of the session, you will also get a fair understanding of your net income and expenses for the month along with ways to manage expenses. The session will also help you to come out with an action plan to increase your income and come out with various wealth management strategies.
The services of credit counseling are generally available at a nominal charge of 30 – 50 dollars. However, as per the regulations, the counseling is mandatory and you may get free credit counseling for bankruptcy.
It is critical to get the right credit counseling professional from the list of the approved counselors. Here are list of questions that can help you to evaluate and decide on your counselor:
1. What are the services offered?
2. What is the fee of the counselor?
3. What do these fees include?
4. What will happen if I am unable to pay the fees?
5. When do I get the counseling certificate?
6. How do you keep my personal information like address, contact details confidential and secure?
7. What are the credentials with regards to the bankruptcy counseling?
It is always wise to reconsider your financial status and available alternatives to avoid filing bankruptcy, so that you can comfortably regain your financial health over a period of time and fulfill future needs.
This really is an excellent article, David. Many thanks for explaining the credit counseling process to all of us that plan to file for bankruptcy. It’s a great help!