Before You File for Personal Bankruptcy Know There Is Pre-Bankruptcy Counseling Available:
Looking For The Appropriate Information About Pre Bankruptcy Credit Counseling and Debtor Education Is Essential. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, those individuals who plan on filing for bankruptcy protection must get credit counseling from a government-approved credit repair organization within 180 days before they file any form of bankruptcy. They also must complete a debtor education course to have their debts discharged.
The Department of Justice’s U.S. Trustee Program approves credit repair organizations to provide the mandatory credit counseling and debtor education. Only the credit repair counselors and financial educators that appear on the U.S. Trustee Program’s lists can advertise that they are, for certain, approved to provide the essential credit counseling and debtor education. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these particular states, court officials called Bankruptcy Administrators approve pre-bankruptcy credit counseling organizations and pre-discharge debtor education course providers.
Pre-Bankruptcy Counseling and Education Requirements
As a general pre bankruptcy rule, pre-bankruptcy credit counseling and pre-discharge debtor education may not be provided at the same time. Debt and credit repair counseling must take place before you file for bankruptcy; debtor education must take place after you file.
Generally speaking, you must file a certificate of credit counseling completion when you file for bankruptcy, and provide evidence of completion of debtor education after you file for bankruptcy – although before your debts are discharged. Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against any sort of credit fraud, the associated certificates are produced through a central automated system and are numbered.
Pre-bankruptcy Counseling
A pre-bankruptcy credit repair counseling session with an approved credit counseling organization should include an initial financial evaluation of your personal financial situation, a discussion of associated alternatives to bankruptcy, and a personal budget plan as the initial steps taken. A typical credit counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online which ever is based on a case to case basis.
The credit repair counseling organization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for credit counseling, you should request a fee waiver from the credit counseling organization before the credit repair session begin. Otherwise, you may be charged a fee for the credit counseling, which will generally be about $50, depending on where you live, the types of financial services you receive, and other factors obviously will factor into the overall evaluation. The credit counseling organization is required to discuss any upfront fees with you before starting the credit counseling session. So you will know exactly what type of charges you will be looking at prior to starting.
Once you have completed the required credit counseling sessions, you must get a certificate as proof and make sure to keep this with you at all times for future reference. Check the U.S. Trustee’s website to be sure that you receive the certificate from a credit counseling organization that is approved in the judicial district where you are filing bankruptcy. Credit counseling organizations may not charge an extra fee for the certificate.
Post-Filing Debtor Education
A debtor education course by an approved credit repair provider should include information on developing a budget, managing money, using credit wisely, and other available resources that will prevent this type of situation ever to arise again. Like pre-filing credit counseling, debtor education may be provided in person, on the phone, or online. The debtor education session might last longer than the pre-filing credit counseling, so expect to be about two hours and the typical fee is between $50 and $100. As with pre-filing credit counseling, if you are unable to pay the credit session fee, you should seek a fee waiver from the debtor education provider. These programs are there to help assist in any way for you the consumer to get the needed help.
Once you have completed the required debtor education course, you should receive a certificate as proof. This certificate is separate from the certificate you received after completing your pre-filing credit counseling. So remember that you will want to keep the original certificates and make copies for any future reference checks. Check the U.S. Trustee’s website to be absolutely certain that you receive the certificate from a debtor education provider that is approved in the judicial district where you filed bankruptcy. Unless they have disclosed a charge to you before the counseling session begins, debtor education providers may not charge an extra fee for the certificate. So make sure to ask this prior to signing any documentation or starting any debtor education course sessions.
Important Questions to Ask When Choosing a Credit Counselor
It’s always a good idea to complete as much research when choosing a credit counseling organization especially when dealing with any sort of pre-bankruptcy credit counseling. If you are in search of credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list at www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm or at the bankruptcy clerk’s office for the district where you will file for bankruptcy. Once you have the list of approved credit organizations in your judicial district, call several to obtain the appropriate information before you make your choice to deal with any one.
Here are a list of key questions to ask when you are looking to qualify a credit organization for your future business:
* What services do you offer?
* Will you help me develop a financial plan or budget for avoiding financial problems in the future?
* What are your associated fees for your credit repair services?
* What if I can’t afford to pay your fees are your services still available to me?
* What qualifications do your credit counselors have?
-Are they accredited or certified by an outside credit organization?
-What sort of training do they receive?
* What do you do to keep personal information about me (including my address, phone number, and financial
information) confidential and secure?
* How are your employees paid?
-Are they paid more if I sign up for certain financial services, if I pay a fee, or if I
make a contribution to your credit organization?
If you have to absolutely file for bankruptcy then make sure to look into all of your available resources in your local district. If you are anyone you know suffer from the ill affects of financial hardship and think you can use the advice of a credit credit organization then please call to get the appropriate advice first. Knowing what kind of pre-bankruptcy counseling that is at your disposal can really save you a lot of stress and may possible help get you educated on how to financially make better choices.
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