Mandatory Credit Counseling
The federal bankruptcy law now requires anyone who wishes to file Chapter 7 or Chapter 13 to obtain a credit counseling certificate. The purpose of credit counseling is to help potential bankruptcy filers learn about alternatives to bankruptcy. In reality, however, credit counseling has not changed filing rates very much - only a tiny percentage of individuals who complete the mandatory credit counseling manage to avoid filing bankruptcy.
Nevertheless, you must have a credit counseling certificate before you will be allowed to file.
Many credit counseling vendors offer courses on-line or over the phone. Some vendors offer live classes. Pre-bankruptcy counseling will take between 45 minutes and two hours and your certificate will be good for 180 days.
Most credit counseling vendors charge between $35 and $50. Most charge only one fee for joint counseling for a husband and wife.
If you think that bankruptcy may be an option, I recommend that you go ahead and take the course and get your certificate. If you are faced with a filing emergency and can’t get a counseling session scheduled, you will have to wait to file. The wording of the credit counseling law also suggests that you cannot file on the same day as you obtain counseling. This issue is not yet settled, but to be safe, you are better off taking the course and obtaining your certificate prior to the day you actually file.
Most people take their classes over the Internet, or by phone.
Here are several credit counseling vendors to contact. Unless otherwise indicated, these vendors offer both the pre-bankruptcy credit counseling and the post-filing financial management course:
Consumer Credit Counseling
Dave Ramsey’s Financial Peace University Bankruptcy Edition
Pioneer Credit Counseling
A 24-7 Class (personal financial management course only)
Academy of Financial Literacy (personal financial management course only)
YourBankruptcyParter.com - $50 per case, single or joint
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