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Do you need to do credit counseling before filing?

If you have decided to file personal bankruptcy to get out of debt, there are many steps you need to take before you complete this process and get a fresh financial start. One of these involves finishing pre-bankruptcy credit counseling before you file.

According to the Federal Trade Commission, you must complete a credit counseling course through an agency approved by the government within 180 days before you file for bankruptcy. You can only choose a counseling provider from the U.S. Trustee Program’s list.

What pre-bankruptcy counseling involves

During pre-bankruptcy counseling, you will undergo an evaluation of your personal financial situation. You will also discuss alternatives to bankruptcy and talk about developing a personal budget plan for after you file bankruptcy. Most sessions last anywhere from 60 to 90 minutes, and they can take place online, over the phone or in person.

When to file the certificate

After you finish pre-bankruptcy counseling, you must obtain a certificate to show you that completed this requirement. The credit counselor you work with cannot charge extra to provide you with this certificate. Submit this certificate after you finish the counseling courses, so you can move forward with the bankruptcy process.

In addition to selecting an approved pre-bankruptcy credit counseling agency, there are other factors you should consider when making a selection. Ask what services the agency provides, if they can help you develop a plan to avoid debt in the future, what their fee structure is like and the qualifications, training and experience of their counselors.


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