Are you having a hard time paying your bills? Do they seem like they just keep adding up? Sometimes, people in this situation think that filing for bankruptcy is the easy way out. The truth is that your should consider bankruptcy as your very last resort. There are long term effects of this course of action that most people do not understand. They often do not realize that that there is a whole process that must happen before and after you file for bankruptcy.
Because of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, it is a requirement that people who plan to file for bankruptcy protection must receive counseling from a government approved agency within six months before filing. After they file for bankruptcy, they must complete a debtors education course. Only counselors and educators that appear on the approved list maintained by the Department of Justice U.S Trustee Program can provide the counseling. By law the U.S. Trustees Program cannot operate in Alabama and North Carolina because they have what are referred to as Bankruptcy Administrators.
The credit counseling and debtor education might not take place at the same time. But it is necessary for those who are filing for bankruptcy to complete both. The counseling must take place before filing, a certificate of credit counseling completion must be attained when filing for bankruptcy. The debtor education program normally takes place after the filing.
The counseling session includes an evaluation of your personal financial situation, a review of the alternatives to bankruptcy, and developing a budget plan. Normally, the session takes about an hour. It may be taken in person, on line, or over the phone. For people who cannot afford to pay for the counseling the organization is required to provide their services free of charge. The fee will be about $50 for those who can afford to pay. Once the counseling has been completed you a certificate will be given as proof you have taken the course.
You can decide what organization you wish to use for credit counseling. Here are some questions you should be sure to ask when you are deciding: What are the services that you offer? What are your fees? What if I can’t afford your fees? What are the qualifications of your counselors? Will you help me develop a plan for avoiding problems in the future. The answers to these questions will have a good idea about the organization and will make your decision much easier.
The educational courses will contain information similar to that in the counseling sessions. The focus will be on budgeting and using credit wisely. Like the counseling sessions you may be able to take the educational courses either in person, over the phone or on line. These courses will last about two hours. The fee should between $50 and $100. You can seek a waiver if you are unable to pay. You should also receive a certificate as proof that you have taken the course.