What Is the Role of Credit Counseling in Bankruptcy?

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A credit counseling course is actually an important part of the bankruptcy process. It takes place before you formally file for bankruptcy, and it’s a necessary step for anyone who needs to get a full appraisal of their financial situation. Once you complete the class, a Bergen County bankruptcy lawyer from our firm can help you figure out the next move.

Do I Have to Go to Credit Counseling?

Yes, it’s rare that anyone gets out of this obligation. You have to go to credit counseling within 180 days prior to filing for bankruptcy. This course exists to ensure that people have exhausted their options and that a significant step like bankruptcy is a necessity.

How Can Credit Counseling Help Me?

A credit counseling course can help you review your income and expenses. It can also give you the tools you need to make a more realistic budget. However, its main purpose is to see whether or not you need to go through bankruptcy.

Depending on your income, expenses, and level of debt, you may not need to file for Chapter 7 or Chapter 13 bankruptcy after all. In your credit counseling course, you get the chance to negotiate with creditors to create a flexible repayment plan. If you can make a plan that works for your budget, then you and your creditors can agree to it, no bankruptcy process required.

If you absolutely cannot make a feasible payment plan even after your credit counseling course, then you are given permission to file for bankruptcy. The course is just a necessary step to ensure that you are making the right decision.

Is Credit Counseling the Same as Debtor Education?

Credit counseling and debtor education are not the same thing, but they are both required steps of the bankruptcy process. Debtor education comes after the process has begun though. Before your debts are discharged, debtor education classes can teach you how to more effectively manage your debts in the future. This course is designed to ensure that you do not fall into any traps or make the same financial mistakes over and over again.

Do I Need a Bankruptcy Lawyer?

Going through bankruptcy is a big commitment. We recommend having a lawyer by your side to handle all of the paperwork. We can also answer any questions you have and keep you reminded of important dates and deadlines. A lawyer can also be helpful if there is any pushback from your creditors when you make a payment plan.

Contact Our Law Firm

So when you are ready to wipe the slate clean and get a fresh financial start, contact the Law Office of Boyd & Squitieri. We will treat you with respect throughout this entire process, and we’re ready to answer any questions you may have. Take charge of your financial future today.