Hitting the Books for Bankruptcy

Bankruptcy is a big step. It is considered the debt relief method of last resort. If you have made the decision to go this route, there are important steps to take. Itt is important to keep in mind there are two required educational courses the court will require you to take – credit counseling and debtor education.

A debtor interested in bankruptcy must take a credit counseling program within 180 days prior to the bankruptcy filing.  A typical pre-bankruptcy credit counseling session lasts 60 to 90 minutes. It can be done in person, over the phone, or online. Beyond an evaluation of your personal finances, your meeting should include a personal budget plan and a discussion of possible approaches to your debt. 

If you are unable to pay, the counseling organization will offer you a free session. If this is the case, they will ask you to submit a fee waiver. Normally, the cost of a session should land at about $50. The counseling organization must discuss any fees with you before the counseling session.

To have the court acknowledge your session, the counseling organization must be certified by the U.S. Department of Treasury. Only a certified counseling organization can issue the certificate of completion necessary to pursue a bankruptcy.  The names of certified agencies can be found at a U.S. Trustees Web site.

When choosing a credit counseling organization, you should learn the counselor’s fees, services, alternatives to the fees, qualifications, accreditation and certification, maintenance of personal information, and the aid they offer developing a future financial plan.

A debtor education course will take a little longer and be a little more expensive – about $50 to $100 for a two hour session.  It can also be done over the phone, online, or in person.  It takes place during the bankruptcy term.

Check for approved debtor education courses at www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm or at the district’s bankruptcy clerk’s office.

Source: http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre41.shtm

www.usdoj.gov/ust/eo/bapcpa/ccde/de_approved.htm