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What You Need To Know About Credit Counseling For Chapter 7 Bankruptcy

Filing for Chapter 7 bankruptcy is a difficult decision to make. The process can feel complicated, but by knowing the additional requirements expected of you, you can navigate the process with more ease.  

How Credit Counseling Works

Before you're allowed to file for bankruptcy, you must be able to demonstrate you attended credit counseling from a counselor approved by the U.S. Trustee's office. Once you find a credit counseling agency, make sure you bring all of your relevant financial information. This means income statements, collection statements and bills. You will be given a repayment plan based on your expenses and income, and you will be given a certificate stating you attended the counseling session.

Law dictates only that you go through the counseling. You don't necessarily have to follow through with the credit counselor's repayment plan. This credit counseling serves as a sort of screening to see if you have any alternatives to bankruptcy.

In most cases you are only expected to attend a single session. If you're concerned you may not be able to afford the fee associated with the credit counseling session, you should be able to obtain the session at either a reduced fee or free of charge.  

How Credit Counseling Affects You In Bankruptcy

Based on what the credit counseling agency finds, you will either be able to go along with filing a Chapter 7 bankruptcy, or you may be asked to file a Chapter 13 bankruptcy instead. Even if your debts are obviously too high for a repayment plan attending the credit counseling session can only help you.

In order for your credit counseling to fall into line with Chapter 7 bankruptcy regulations, you must attend the session within 180 days before you file for bankruptcy. Following the session, there are two forms you will need to bring when you file for Chapter 7 bankruptcy: the certificate stating you completed the counseling and the repayment plan if the credit counseling agency gave you one.

When To Seek Help

If you're pursing Chapter 7 bankruptcy and you aren't sure what to do next, you may want to contact a bankruptcy attorney such as FactorLaw. They will be able to guide you through the bankruptcy process and ensure you don't miss any requirements. A bankruptcy attorney will also be able to help protect your rights during bankruptcy and get you back on steady financial ground as quickly as possible.