What Do Consumers Need to Know About Filing for Bankruptcy?

According to an article from the Federal Trade Commission (FTC), many Americans who are planning to file for consumer bankruptcy don’t have all the relevant facts.  Are you considering Chapter 7 bankruptcy or Chapter 13 bankruptcy?  First thing’s first: you will need to have an experienced Chicago bankruptcy lawyer who can help you navigate the complexities of bankruptcy law.  In addition, it’s very important that you understand the steps you’ll need to take in order to be eligible for bankruptcy protection.  The FTC outlines the need-to-know basics in its article, and these quick facts will be essential to debtors throughout the Chicago area.
Getting Credit Counseling
The first step in filing for bankruptcy actually needs to happen before you file.  In other words, you’ll need to get credit counseling before you file for bankruptcy.  And once you’ve completed credit counseling, you’ll have to file a certificate of completion at the time you file for bankruptcy.
The FTC explains that every debtor who plans to seek personal bankruptcy protection will need to “get credit counseling from a government-approved organization.”  This pre-bankruptcy credit counseling needs to take place within 180 days before you file for bankruptcy.  What’s involved in credit counseling?  It will likely include a session in which your financial situation is evaluated, and in which you and the credit counselor will discuss bankruptcy alternatives and a “personal budget plan.”  Based on information in the FTC’s article, a session usually lasts somewhere between 60 to 90 minutes.  It doesn’t even need to take place in person—you can complete the counseling over the phone or online.  And unless you can prove that you can’t afford it, you’ll pay approximately $50 for the session.
According to the FTC, you’ll need to ensure that you get counseling through one of the organizations that has already been approved by the Department of Justice’s U.S. Trustee Program.  How can you know if you’re getting counseling from a government-approved organization?  This part is pretty simple: counselors who have been approved by the U.S. Trustee Program can advertise that, and others can’t.  So, look for someone who advertises that they’re approved by the U.S. Trustee Program to provide pre-bankruptcy credit counseling.
Complete a Debtor Education Course
In addition to receiving credit counseling before you file for bankruptcy, you’ll also have to take a pre-discharge debtor education course.  What is this?  In short, it’s a class you’ll need to take after you’ve filed for bankruptcy in order to have your debts discharged.  The course typically lasts longer than a credit counseling session at approximately 2 hours.  And as with credit counseling, you’ll need to pay a fee unless you can prove that you can’t afford the course.  Fees for a debtor education session typically run between $50 and $100.
With the debtor education course, you’ll also get a certificate that proves you’ve finished your required session.  You’ll need to make sure that the course provider is “approved in the judicial district where you filed for bankruptcy.”   
If you’re thinking about filing for bankruptcy in Illinois, it’s important that you know the requirements surrounding credit counseling and debtor education.  By speaking with an experienced Oak Park bankruptcy attorney at the Emerson Law Firm, you can ensure that you meet all the requirements for bankruptcy filing.  Contact us today to learn more about how we can help.
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