Did you know that every bankruptcy petitioner is required to complete a credit counseling course before they file bankruptcy ? They are required to complete two credit counseling classes – one before filing and one before they receive their discharge of debt. For many consumers, bankruptcy is the last resort after savage struggles against the impossible nature of overwhelming debt. The decision to file bankruptcy is not made lightly. It does not come without consequences, as the bankruptcy stays on your record for years to come (and it is not seen as a positive mark on the report). If you are at the point of filing and you aren’t sure why you need to complete credit counseling classes when you have already been through the wringer, or what they will require from you, consider the following information.

When you decide to file bankruptcy, you will need to complete mandatory credit counseling. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 reformed bankruptcy law and makes both courses mandatory. The bankruptcy court will only accept credit counseling classes completed through programs approved by the Executive Office for U.S. Trustees, so work from the list of approved courses provided by your bankruptcy attorney or the bankruptcy court. The Executive Office for U.S. Trustees is the part of the Department of Justice that oversees bankruptcy cases. The first required credit counseling class is known as pre-filing bankruptcy counseling. The second required credit counseling class is known as a pre-discharge credit counseling course.

Mandatory pre-filing credit counseling courses focus on a review of the current financial situation, alternatives to bankruptcy, and understanding the consequences of filing. The process of completing pre-filing credit counseling takes approximately one hour, and the price varies depending on where you take the course. Many choose to take the course through an online program. The mandatory pre-discharge credit counseling class takes closer to two hours to complete. It focuses on more in-depth finance topics (like budgeting, different products, and tools, credit scores, etc.). Petitioners can expect pre- and post-tests measuring their retention of the info offered on the various topics, including methods of re-establishing credit post-bankruptcy, and avoiding getting back into debt. Online courses are also available for pre-discharge credit counseling.

Bankruptcy petitioners completing the mandatory credit counseling classes receive services from reputable agencies do so because bankruptcy law requires it to file or receive a discharge of debt. However, the intention behind the law is to prevent consumers who have better options from filing if they have not yet considered other, more appropriate choices in their circumstances, to educate bankruptcy petitioners about what it means to file bankruptcy and to ensure bankruptcy filers have the tools they need to make the most of their fresh financial start after the bankruptcy is complete.

If you have questions about the bankruptcy process, or if you need to discuss the protections offered by bankruptcy, we can help. Ask about stopping wage garnishment immediately by filing; get in touch with Kenneth C. Rannick P.C., Tennessee, and Georgia bankruptcy attorney as soon as possible.

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