What Is the Deal With Pre-Bankruptcy Counseling?

A Hobart Bankruptcy Attorney Can Help Ease Your Bankruptcy Process

Making the decision to go forward with a bankruptcy proceeding is a tough choice. But if you think that is the best option for you, then there are some steps that you need to complete before you can even file for bankruptcy. One of the first things that you need to do before you can file for bankruptcy is complete a pre-bankruptcy credit counseling session, which is required by law. You must complete your pre-bankruptcy credit counseling session within the six months before when you plan to file for bankruptcy.

What is Pre-Bankruptcy Credit Counseling?

A pre-bankruptcy credit counseling session is an opportunity for you to sit down with a counseling agency representative who is approved by the United State Trustees Office of the Department of Justice. The counseling representative’s job is to counsel you on the options and alternatives to bankruptcy that may be available to you. For instance, your pre-bankruptcy credit counselor might work with you to develop a repayment plan that will help you manage the repayment of your debts, or might help you develop a budget. You need to explore all the possible alternatives when you are making such a serious decision like filing for bankruptcy.

While filing for bankruptcy is a good way to discharge your debts, there are also a lot of consequences that go with filing for bankruptcy, and you need to understand with those consequences are before you choose to go down the bankruptcy path. For instance, a bankruptcy will adversely affect your credit score, may make it difficult for you to obtain new lines of credit, such as getting a loan or a new credit card, and could even prevent you from getting certain types of jobs. It is important that you weigh your options before committing to filing for bankruptcy.

At the conclusion of your counseling session, the pre-bankruptcy credit counselor will provide you with a recommendation of whether or not you should proceed with bankruptcy, or you should pursue an alternative to bankruptcy. The credit counselor’s recommendation is non-binding, and you can choose to follow his or her counseling guidance, or proceed with bankruptcy. It is your choice.

Your agency representative will also provide you with a certificate confirming that you have completed your required counseling session. This certificate allows you to proceed and file your bankruptcy paperwork. The counseling session generally cost about fifty dollars, but if you are unable to pay for your counseling, there is an option which could get you these important services for free, but certain eligibility requirements apply.

Contact an Experienced Michigan Bankruptcy Attorney Today

As an initial step to filing for bankruptcy, you must complete pre-bankruptcy counseling. If after your counseling session is completed and you still think that bankruptcy is the best choice for you, it is critically important that you get in touch with a bankruptcy attorney as soon as possible to discuss your particular situation, and the recommendation of the pre-bankruptcy credit counselor. A Michigan bankruptcy lawyer at the Law Offices of Kevin Schmidt can help understand the bankruptcy process and what it all means.