The decision to file for bankruptcy is a serious one, and the many requirements inherent in the bankruptcy process are meant to reflect that. They are also meant to ensure that those who file for bankruptcy understand the gravity of their decision to do so. One such obligation part of the bankruptcy process is the mandatory credit counseling requirement that all individuals who file either a Chapter 7 or a Chapter 13 bankruptcy petition are required to complete.
The Purpose of the Credit Counseling Requirement
While it is a recognized requirement for all parties who file for bankruptcy to undergo credit counseling, it also offers real benefits to debtors. It helps petitioners understand the process of filing for bankruptcy as well as the consequences of deciding to do so. The credit counseling course is required to be completed by all debtors who file a petition for bankruptcy and gives them the opportunity to understand the advantages, disadvantages, and alternatives to declaring bankruptcy before their petition is filed. This ensures that all petitioners enter into a bankruptcy proceeding with a good foundational knowledge of what is involved in the process, the consequences he or she will face or could potentially face in light of filing, and any alternatives to bankruptcy that may be available to them in lieu of filing a petition for bankruptcy.