What is bankruptcy credit counseling advice?

Answer 1

Bankruptcy is legally declaring your inability pay your bills. The average person filing for bankruptcy is $25,000 to $30,000 in debt. It is now a requirement for consumer debtors filing for bankruptcy in the United States to complete a program with an approved non-profit budget and credit counseling agency during the 180-day period preceding the filing of bankruptcy. A list of approved credit counseling agencies by state and judicial district is available on the U.S. Trustee program website and will also tell you where to take the courses to prepare for bankruptcy.

There are several forms of bankruptcy that can be filed. The two most often used by individuals are Chapters 7 and 13. Chapter 7 bankruptcy does not involve a plan for repayment. It is used when you have no regular income and involves the sale of your assets, with few exempt items, to pay as much as possible. real estate mortgages and other secured loans (e.g. car loans), survive. The value of property that can be claimed as exempt varies from state to state. Other assets, if any, are sold to repay your creditors. There are items of your debt that will not be discharged in Chapter 7, such as child support, income taxes, property taxes, alimony and student loans. Despite this, all debts must be listed. You should check your qualifications and educate yourself as much as possible about all your alternatives before making any decision. A Chapter 13 allows for adjusting debts for someone with a regular income. It allows you to keep your property and pay debts over a three to five year period. If at the end of that period your creditors have not all been paid - your further debts are discharged. It's important to realize that any bankruptcy will stay on your credit reports for 10 years after you are discharged. No individual may be a debtor under chapter 1 of the bankruptcy code unless he or she has, within 180 days before filing, received credit counseling from an approved credit counseling agency either in an individual or group briefing.

It is your responsibility to educate yourself as much as possible before making such a serious decision and proof of your attendance, or certification that you have attended approved credit counseling before you file is mandatory. You may be able to get this online but make sure you receive services only from an approved provider for your judicial district. You can get a free "evaluation" online from several law firms, but most initial consultations are free. To find a local bankruptcy attorney who will be committed to getting you debt relief and provide you with information, advice and services, you can get a referral to a local law firm or simply use an online business listings website.

Wondering how you can pay the attorney? Filers might expect to pay up to about $2,500 for Chapter 7 and up to $3,500 for Chapter 13 and many people think they can not afford that. You may be able to find an attorney through legal aid services. There are fees that are dictated by the court, such as filing fees that are unavoidable. Find an agency that is local to you. You may be able to have the fees added into the bankruptcy settlement. Most bankruptcy attorneys will offer several options such as paying the fees in installments, or restructuring debt payments in order to free up money to pay the fees. An experienced bankruptcy attorney is familiar with the difficulty of paying fees and should be able to suggest ways of accomplishing this. Don't assume that you won't be able to pay.