The credit counseling requirement is a crucial part of the bankruptcy process. Before an individual can file for bankruptcy, they must complete a credit counseling session with an approved agency. This requirement applies to both Chapter 7 and Chapter 13 bankruptcies.
The purpose of the credit counseling session is to help individuals understand their financial situation and to explore alternative options to bankruptcy. The credit counseling session typically lasts for about an hour and can be completed in-person, by phone, or online. During the session, the individual will provide the credit counselor with information about their income, expenses, and debts. The credit counselor will then use this information to create a budget and to discuss alternatives to bankruptcy, such as debt management or debt settlement.
After the credit counseling session, the individual will receive a certificate of completion, which must be filed with the bankruptcy court. The certificate of completion serves as proof that the individual has completed the credit counseling requirement and is eligible to file for bankruptcy.
In Chapter 7 bankruptcy, the credit counseling requirement must be completed within 180 days prior to filing. In Chapter 13 bankruptcy, the credit counseling requirement must be completed within 180 days prior to filing and the individual must also complete a financial management course after filing. The financial management course is designed to help the individual understand how to manage their finances after bankruptcy and is a requirement for obtaining a discharge of their debts.
It’s important for the individual to choose a credit counseling agency that is approved by the U.S. Trustee’s Office. An approved agency must meet certain standards and must be in good standing with the Trustee’s Office. A list of approved credit counseling agencies can be found on the U.S. Trustee’s website.
In conclusion, the credit counseling requirement is an important part of the bankruptcy process and must be completed before an individual can file for bankruptcy. If you have questions about the bankruptcy process, contact Cornerstone Law Firm for a consultation on your situation and needs. Our experienced bankruptcy attorneys can help you navigate the process.