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.
What to Expect from the Session
Part of the requirement is that the counseling session must be completed with an approved agency within six months of filing the bankruptcy petition. An experienced bankruptcy attorney will be able to advise his or her clients about approved credit counseling sessions at little or no cost and provide any additional information the client may need about this requirement. Usually, a credit counseling session will last anywhere from one hour to an hour and a half, and include general information about the bankruptcy process itself, as well as inform petitioners about potential alternatives to bankruptcy and some advantages and disadvantages associated with the process.
Many programs include a personalized budget analysis tailored to the debtor and will address what circumstances or other factors led to this point of financial hardship. The counseling sessions can occur in person, over the phone, or on the internet, depending on the course and the preferences of the participant. After a petitioner completes the course, he or she will be awarded a certificate indicating his or her completion that must be provided to their attorney to include in the bankruptcy petition prior to filing.
Choosing a Credit Counselor
A credit counseling session must be completed with an approved provider in the debtor’s appropriate judicial district. The petitioner’s bankruptcy attorney will more than likely be able to assist their client in choosing a proper credit counselor, but some key questions to keep in mind include:
- What services does the program offer?
- Does the program include a plan for avoiding future financial problems?
- What are the fees associated with the program?
- Are counselors properly trained and qualified?
- Will personal information be kept safe and confidential?
If you are interested in filing for bankruptcy in South Florida, the attorneys at Hoffman, Larin & Agnetti, P.A. can assist you with your case. Contact us to schedule a consultation. Our offices are located in Dade, Broward, and Monroe Counties.