Bankruptcy Credit Counseling - Necessary For Filing Personal Bankruptcy

The persons who need to file bankruptcy are often those who are overwhelmed with debt and can't pay back

. But as per the federal rules, it is mandatory for every individual filing for Chapter 7 or 13 to take bankruptcy credit counseling course before filing for bankruptcy. There is also a second course called the Pre-Discharge Debtor Education or Personal Financial Management course that is mandatory as well. Bankruptcy cannot be discharged until the debtor shows proof that they have completed both the pre-filing and the pre-discharge courses. Upon completion of the course, a Certificate of Completion is issued which serves as the required proof.

There are two types of Bankruptcy Classes: Pre-Filing Credit Counseling and Pre-Discharge Financial Management. The main intent of credit counseling class is to make bankruptcy the very last resource to which people should resort to. And yes of course, these aren't the only bankruptcy filing requirements but are two of the mandatory steps. Therefore, no need to state that both of the bankruptcy counseling courses completion is essential and the certifications for the same prove that the debtor has been educated by professionals to understand proper budgeting, money management and regarding using the credits without ending up in trouble.

What exactly is covered under these two categories of bankruptcy counseling class is comprehensively covered under the following heads:

Pre-bankruptcy credit counseling

Being a basic budget class, there is evaluation of debtors financial situation including debtors income, debt, expenses, and assets

By analyzing the calculations, showing the options aside from bankruptcy to the debtors

Pre-Discharge Financial management Course

The basic purpose of this course is to educate debtors regarding -

Planning a budget and managing within that

Inculcating and improving spending habits

Learning skills like saving and budgeting for money management

Proper utilization of credits etc.

If you are planning to file a bankruptcy case, your attorney needs a copy of the course completion certificate prior to filing your case. Otherwise you can face a motion to dismiss your case for failure to file this pre-filing bankruptcy credit counseling certificate. The certificates are generated through a central automated system and are issued by the government approved institutions.

by: LC Kerby

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