Credit Counseling Before Filing Bankruptcy
Before filing for bankruptcy, it is important to get counseling for your credit to make sure that your rating isn't too badly affected by filing for bankruptcy. In fact, changes to bankruptcy law in 2005 made credit counseling a mandatory part of the process. But don't be sad about this as, at the very least, knowing the potential results to your credit of the bankruptcy filing process can help you know what choices you have to make and can even have an effect on how you file.
Credit Counseling is Key
You actually have to file a certificate of completion in credit counseling before you are even allowed to file for bankruptcy now. So, now that the road to filing for bankruptcy runs through credit counseling, it is also important to know what to look for in a credit counselor. Firstly, you should absolutely check if a counseling agency will provide the needed certificate to show evidence that you have been certified in counseling, and that your credit has already been looked at by someone qualified. Knowing in advance that the counseling is working towards a purpose is a great first step in optimizing the entire procedure.
What to Look For
In fact, some credit counselors will already offer specialized "pre-Bankruptcy" courses designed to counsel you specifically in the circumstance of your bankruptcy filing. These courses will detail everything you need to know about credit rating materials before your filing. A good course will include an evaluation of your current credit and financial status, a discussion of potential bankruptcy alternatives that you should consider, and will also detail the construction of a personal budget plan to help you through your proceedings.
Fees and Expectations
Generally, counseling sessions will require a fee. The average fee is around $50, but agencies are required to provide their counseling services to you for free if you are unable to pay. Obviously, you will need to provide proof of your inability to pay before requesting this part of the service. You must discuss any fees with the credit counselor before beginning with their services, as required by the law. A typical course will last 60 to 90 minutes, and can take place in person, online, or even over the phone.
Before considering a counselor, you need to better understand their procedures. Make sure you know what fees to expect, obviously, but beyond that also make sure you understand what records will be kept of you, whether they are already accredited or certified by an outside service, and how they can help you develop plans to avoid bankruptcy or other credit problems in the future.
Credit Counseling is Key
You actually have to file a certificate of completion in credit counseling before you are even allowed to file for bankruptcy now. So, now that the road to filing for bankruptcy runs through credit counseling, it is also important to know what to look for in a credit counselor. Firstly, you should absolutely check if a counseling agency will provide the needed certificate to show evidence that you have been certified in counseling, and that your credit has already been looked at by someone qualified. Knowing in advance that the counseling is working towards a purpose is a great first step in optimizing the entire procedure.
What to Look For
In fact, some credit counselors will already offer specialized "pre-Bankruptcy" courses designed to counsel you specifically in the circumstance of your bankruptcy filing. These courses will detail everything you need to know about credit rating materials before your filing. A good course will include an evaluation of your current credit and financial status, a discussion of potential bankruptcy alternatives that you should consider, and will also detail the construction of a personal budget plan to help you through your proceedings.
Fees and Expectations
Generally, counseling sessions will require a fee. The average fee is around $50, but agencies are required to provide their counseling services to you for free if you are unable to pay. Obviously, you will need to provide proof of your inability to pay before requesting this part of the service. You must discuss any fees with the credit counselor before beginning with their services, as required by the law. A typical course will last 60 to 90 minutes, and can take place in person, online, or even over the phone.
Before considering a counselor, you need to better understand their procedures. Make sure you know what fees to expect, obviously, but beyond that also make sure you understand what records will be kept of you, whether they are already accredited or certified by an outside service, and how they can help you develop plans to avoid bankruptcy or other credit problems in the future.
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