Bankruptcy Counseling

Before a person can file for bankruptcy protection, they must undergo bankruptcy counseling. If you don't complete the counseling as it is set forth, you won't be eligible for bankruptcy protection and the court will deny your petition. There are some exceptions to bankruptcy counseling rules, but most people should complete the program before they file. Most bankruptcy counseling programs range in price from totally free to fifty dollars.

Bankruptcy counseling programs are intended to make sure that bankruptcy is an appropriate course of action for your situation. During the counseling, you will meet with a credit counseling service, which will look at your financial status and put together a plan meant to get you back on solid financial ground. The recommendations of the credit counseling agency might or might not include filing for bankruptcy. Any credit counseling must be given by a US Trustee-approved agency; a list of agencies can be found on their website.

Credit counseling has to be finished within one hundred eighty days before the bankruptcy filing. When the counseling is finished, your credit counseling agency will give you a completion certificate; you will need to file it with your local bankruptcy court within fifteen days of filing. Most filers have to finish bankruptcy counseling before they can file, but as we mentioned, there are some cases where it is not required. If there is a pressing reason why you need to file for bankruptcy immediately (such as a pending home foreclosure), you may not have to go to counseling.

The second exception to the rule is if you requested credit counseling but could not start within five days of requesting it. Even in the case of either of these exceptions, you will still need to undergo counseling within one month of filing. Most times, you will have to pay a fee to the agency providing you with bankruptcy counseling; the US Trustee has set forth guidelines for these fees, such as that a reasonable price is fifty dollars or less. Most fees are based on your ability to pay.