What is Credit Counseling for Personal Bankruptcy?

If you are considering personal bankruptcy, you will likely be required to go through credit counseling. In fact, you will probably be required to go to credit counseling twice at different stages of the bankruptcy process. Whether you are filing for Chapter 7 bankruptcy or Chapter 13 bankruptcy, you should learn more about credit counseling so that you know what to expect. An article in NerdWallet discusses various aspects of the bankruptcy credit counseling process, and we want to share them with you here. If you have additional questions or need assistance filing for bankruptcy, you should get in touch with an Oak Park bankruptcy attorney.

Learning More About Credit Counseling
Credit counseling is a process in which a debtor learns about whether she or he actually needs to file for bankruptcy protection, and to learn more about the benefits and limitations of consumer bankruptcy. During credit counseling, debtors also learn about bankruptcy alternatives that may be available for managing debt.

Accordingly, the first time that a debtor needs to attend credit counseling is before filing for bankruptcy. This is known as pre-filing credit counseling. It is one of the first steps in the bankruptcy process, and it is required for debtors who are planning to file for either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Without a certificate showing that you have completed pre-filing counseling, a court will not consider your bankruptcy petition. Before you even seek out credit counseling to begin the bankruptcy process, however, you should seek advice from a bankruptcy lawyer.

The second required credit counseling sessions comes toward the end of the bankruptcy process and is known as pre-discharge counseling. A debtor is required to go to credit counseling again just before a discharge—before the bankruptcy case is completed—to learn more about managing finances in the future. After both pre-filing and pre-discharge counseling, debtors receive certificates of completion that they must present to the court.

Does Everyone Have to Go Through Credit Counseling Who Files for Consumer Bankruptcy?
Most individuals (or couples) who are filing for consumer bankruptcy under Chapter 7 or Chapter 13 are required to go to the two separate credit counseling sessions we mentioned above. Assuming you do have to attend credit counseling, how do you know where to go? As the article explains, there are nonprofit credit counseling agencies that have received approval from the U.S. Department of Justice. You should use one of these credit counseling agencies, but you should also know that a bankruptcy lawyer can help you to understand more about the credit counseling process and what you must do in order to receive a bankruptcy discharge.

There is a small cost for credit counseling tied to consumer bankruptcy, which can range from $15 to $50 per session, typically.

Seek Advice From an Oak Park Bankruptcy Lawyer
Required credit counseling courses are only two requirements for consumer bankruptcy. An experienced bankruptcy lawyer in Oak Park can discuss the other requirements with you for receiving a bankruptcy discharge. Contact the Emerson Law Firm today to learn more about the services we provide to consumers who are struggling with debt.


See Related Blog Posts:
Can I Keep My Car if I File for Consumer Bankruptcy?
New Report Addresses Trends in Consumer Bankruptcy

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