There is often a misconception surrounding those who file for bankruptcy, labeling them as reckless spenders and financially irresponsible. However, this is not always the truth, also things such as medical bills and unforeseen circumstances can add up very quickly, leaving those with great credit slowly sinking. If you want to file for bankruptcy to regain control of your finances, it’s essential to understand the role credit counseling plays in this process. Keep reading to learn more and discover how a Memphis, TN consumer bankruptcy lawyer can help you.
What Is Credit Counseling?
Credit counseling courses are beneficial for many who struggle with debt as they provide counseling by those trained in different areas of credit, debt management, and budgeting. They will examine your financial situation and help create a plan based on your circumstances. For example, they will help you create a budget for your expenses while crafting a debt management plan to help you reduce the debts you owe.
This is required to see whether or not you need to undergo bankruptcy to regain financial control. Even if your debt is significant and your income is lower, you still must attend counseling. However, it’s important to understand that you are only legally required to complete the counseling sessions. You do not have to accept the plans the agency creates, though you must include them with other documents when filing for bankruptcy.
What Is the Requirement?
If you wish to file for bankruptcy, you must provide a certificate of completion from a credit counseling agency approved by the U.S. Trustee’s office within 180 days of filing for bankruptcy.
You must also take a class after you file, known as debtor education. Again, this provides financial management tools and tips, such as rebuilding your credit score after bankruptcy. You must file this certificate of completion within 60 days of the date set for the meeting of creditors. Failure to file within this time frame can result in the dismissal of your case.
It is critical that your bankruptcy jurisdiction approves the credit counseling court you take. To ensure you are enrolling in the correct course, you can visit the U.S. Trustee’s website. There is a section that lists all approved providers by jurisdiction, ensuring you can find one that is valid for your area.
The only exceptions to credit counseling include:
- No available courses in your district
- Filing bankruptcy is an immediate need to avoid substantial harm
- You are mentally incapacitated, in an active combat zone for military duty, or you have a disability
It is imperative to understand that the first exception is unlikely, as these courses are now offered online and over the phone. Similarly, if you are filing bankruptcy to avoid wage garnishment that would cause significant harm, you must still complete the courses within thirty days of filing.
If you are considering bankruptcy to help you regain control of your finances, ensuring you contact an experienced attorney is essential. At the Arnold Law Firm, our dedicated legal team will help walk you through this complicated process. Contact us today to learn more about how we can help you.