Deciding to file for bankruptcy is not an easy choice to make as it can have a significant impact on your credit despite the financial relief you may get. However, if you’re ready to file, you may be surprised to learn that you must undergo credit counseling courses before you can proceed. If you’re unsure what is required or whether or not you can bypass these courses, you’ll want to keep reading. You’ll learn more about these courses and why it’s in your best interest to connect with an Orange County consumer bankruptcy lawyer who can assist you through this process.
What Is Credit Counseling?
Introduced in 2005 under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, credit counseling became a mandatory step before filing for bankruptcy. In this course, you will meet with a counselor who will review your financial information. Next, you’ll explore alternative options to filing for bankruptcy, such as negotiating repayment plans with your creditors or creating budget plans to help catch up on debts. It’s important to understand that you do not have to follow the plan to file for bankruptcy, but you must include the outcome of the course in your filing.
You should also note that you do not only have to participate in pre-bankruptcy counseling, but you must also take a debtor education course after your case has closed. You must submit certificates of completion for both of these courses before your debts can be discharged. Additionally, courses must be with counselors approved by the U.S. Trustee Program.
Is This Process Required?
Generally, you’ll find that unless there are exceptional circumstances at hand, credit counseling is mandatory for those who wish to file for bankruptcy. If you are at risk for considerable harm unless you immediately file for bankruptcy or have a physical or mental disability that prevents you from participating in the course with reasonable effort, the courts could waive the requirements. Also, you’ll find that if there are no approved agencies in your area and you cannot complete virtual counseling, the court may waive this requirement on your behalf.
Even when bankruptcy is the only option left, whether it’s because your income is incredibly low or your debt is overwhelmingly high, you still must undergo credit counseling.
As there are many steps in bankruptcy, ensuring you have someone familiar with this process to help you navigate your filing is critical. When you’re ready to begin this process, the best thing you can do is connect with the team at the Law Offices of Michael D. Pinsky, P.C. We understand how overwhelming it can be to file, which is why we can help you navigate these circumstances so you can achieve the best possible outcome for your process. Contact us today to learn how we can assist you.
