Bankruptcy Credit Counseling and Certification
admin on February 20th, 2009
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Part of the new bankruptcy laws is mandatory credit counseling that must be complete before filing bankruptcy and a personal finance certification course that must be completed after filing your bankruptcy petition. The two courses are to help you determine if bankruptcy is your only option and hopefully help you create a better financial plan for moving on after your bankruptcy is completed.
Credit Counseling - The credit counseling must be completed with 180 days before filing your bankruptcy petition. Each state has credit counseling centers that have been approved by the bankruptcy courts. The counseling centers offer the credit course in person, and some offer the course over the phone or online.
The course contains three portions: the first portion looks at your current financial situation including your debts and assets, the second portion creates a plan to help you budget your current debts, and the last portion of the counseling takes a look at your options including filing bankruptcy. The credit counseling is not set up to tell you that you cannot file bankruptcy, but it is there to try to get you to take advantage of other options that may be available. Speaking with a bankruptcy attorney at the same time can help you make the right decision for your situation. The average cost of the credit counseling is about $40.
Personal Financial Management Course - After your bankruptcy petition has been filed, the bankruptcy court will instruct you to attend a personal financial management course at an approved location in your bankruptcy district. Just like the credit counseling, the course can typically be completed in person, over the phone or online. This course is designed to help you make good financial choices after your bankruptcy and covers topics like budget development, smart shopping, and the wise use of credit. The average cost of the personal financial management course is about $30.
Keep in mind that both of these requirements were supported by credit companies that don’t want your debt to be wiped out, it’s not because everyone who files bankruptcy does so because they simply didn’t manage their money the right way. Most bankruptcy filers file due to excessive medical bills, a job loss or divorce that created financial problems.
