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Seeking pre-bankruptcy counseling

by Savannah B

in Bankruptcy Questions

Go through bankruptcy counseling before taking the plunge- Knowing the process

For most debtors who are going through hapless financial situations, whether they should file for bankruptcy is one of the biggest decisions that they can make. As a result, this decision should be made only after considering what bankruptcy process entails, the upshots of filing bankruptcy and the prospective alternatives of filing bankruptcy. Nowadays, people are so much irritated with their soaring debt level, that they take the decision of filing bankruptcy very soon. They don’t even consider the bankruptcy alternatives that might have helped them. With the large number of bankruptcy filers, the credit and debt industry is suffering a huge loss and hence the necessity to go through a pre-bankruptcy counseling session has been brought in to make the entire process more transparent.

What is bankruptcy counseling and what is the purpose of it?

While you go through the pre-bankruptcy counseling session, you can fully understand the potential advantages, the disadvantages, the alternatives and the upshots or the consequences of filing bankruptcy. The NFCC or the National Foundation of Credit Counselors believes that they should assist consumers in fully comprehending the implications of the process of bankruptcy and also determine the alternatives that could have saved them from being called a bankrupt. In a nutshell, they could decide whether or not bankruptcy is the best solution for them.

All the individuals who are about to file Chapter 7 or Chapter 13 bankruptcy will be required to go through the pre-bankruptcy counseling session with an approved non-profit credit counseling agency within 6 months from filing. However, the agency that will provide you this session should be approved by the Executive Office for US Trustees or the EOUST.

What should the bankruptcy filers expect from a credit counseling session?

The consumers who opt for pre-bankruptcy credit counseling session with a Member Agency with NFCC might expect the following:

·         A grueling session of counseling with an estimated length of about 90 minutes

·         This particular session will include a total overview of the entire process of bankruptcy, a committed discussion of the feasible alternatives to bankruptcy, that includes the pros and cons, a customized budget analysis and the session will also discuss the reasons that led to the present situation of dire financial straits.

·         The format of the counseling session can either be face-to-face, through the internet or even over the phone. The duration should remain the same.

After the completion of the pre-bankruptcy counseling session, the consumers will receive a certificate that will say the same. If they still decide to file bankruptcy, this certificate should be included in the bankruptcy petition. Before the finalization of bankruptcy and discharge of debts, the consumers also require completing a pre-discharge financial education course from an agency approved by the EOUST.

Choosing a credit counselor who can help you with the entire process

If you’re looking for pre-bankruptcy counseling to fulfill the law requirements of bankruptcy, ensure you receive services from approved providers of your judicial district. You can check the list of approved credit counseling providers in your state online or you can check at the bankruptcy clerk’s office for the particular district where you file. Some key questions that you should ask before finalizing the counselor are:

·         What are the services that you offer?

·         What to do if I can’t afford your fees?

·         What are your fees?

·         Will you help me devise a plan through which I could avoid debt problems in future?

·         What are the qualifications of your credit counselors?

·         Are your credit counselors accredited by any outside organization?

·         Do you keep my financial information safe and secure?

·         How do you pay your employees?

The US Trustee program promotes efficiency and integrity within the bankruptcy system of the nation by enforcing some required laws. Educate yourself on such laws and follow them to maintain a transparent system.

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