Bankruptcy Credit Counseling

Bankruptcy Credit Counseling

Bankruptcy credit counseling is a requirement of the bankruptcy system. It mandates that someone who files bankruptcy must undergo credit counseling before filing bankruptcy and, again, after filing but before the bankruptcy is discharged. It is not difficult to do, nor is it expensive. But it must be done.

Unless bankruptcy credit counseling is obtained before filing, you are not eligible to file. And if you don’t get a second credit counseling session after you file, you won’t receive a discharge. It is a must in the bankruptcy filing process since Congress imposed it as a requirement in 2005.

The purpose of pre-filing bankruptcy credit counseling is to alert consumers to possible bankruptcy alternatives before they file. Almost never, though, are other options besides bankruptcy recommended in the counseling process. That’t because people filing bankruptcy cannot afford their debts, which is why they have begun the bankruptcy process. But if they could, bankruptcy credit counseling could reveal that possibility. Even if you know bankruptcy is your only option, you must still undertake pre-filing bankruptcy credit counseling.

After you have filed, but before your case can be concluded with a discharge, you must take a second credit counseling session commonly called debtor education. Debtor education does just what it says. It educates debtors on debt, financial considerations and budgeting. All this is an effort to counsel the consumer to avoid future financial failings. Though bankruptcy is not always brought on by financial fault, debtor education bankruptcy credit counseling seeks to avoid that future potential.

Cost for bankruptcy credit counseling varies. Typically credit counseling sessions cost less than $25. Upon completion of credit counseling, a certificate of completion is issued. I file these forms for you to reflect completion of your bankruptcy credit counseling requirement.

I have links to a couple of bankruptcy credit counseling companies on my site that I have worked with. There are hundreds of others, though. It makes no difference which one you use, so long as it is approved by the United States Department of Justice. I have never heard of a credit counseling company of agency that isn’t so approved. But here is a link to the Justice Department’s approved list just in case you have concerns.