When your finances become unmanageable to the point where you see no real way of reasonably paying them back within a few years, it may be time to explore your options. Many people who otherwise see no way to dig themselves out of debt are able to start rebuilding their financial lives after getting a fresh start through bankruptcy.
However, the U.S. Courts report that, before you may officially file for personal bankruptcy, you must first take part in credit counseling. Also, after you file for bankruptcy, you need to complete a debtor education course before your debts undergo official discharge.
How credit counseling works
You need to take a credit counseling class through a provider approved by the U.S. Trustee Program. You also have to undergo credit counseling within a particular timeframe before you may initiate the bankruptcy process. The counseling session should give you an idea of whether you truly need to file for bankruptcy or if there might be alternative options that could better suit your needs. Once you complete credit counseling, you receive a certificate stating as much.
How debtor education works
The main point of the required debtor education course is to teach you new ways to manage your finances so that you do not find yourself in the same boat again in the future. You must complete the debtor education course after you file for bankruptcy, but before your bankruptcy case closes.
There may be fees associated with completing credit counseling or debtor education classes. You may be able to pay for these classes on a sliding scale if you are unable to do so all at once.