Much of the focus on bankruptcy is about how to reduce or eliminate your debt and have a fresh financial start. While it is important that you have good information on the right bankruptcy approach for your situation, there is more you need to know. Since 2005, U.S. bankruptcy law has required that consumers take a credit counseling course as part of their bankruptcy filing. Understanding what this means and how to go about it can save you time and money.
The definition of credit counseling
Credit counseling, also known as bankruptcy counseling, serves two purposes achieved through two classes. The first is to review your finances before you file for bankruptcy in order to determine an appropriate plan of action (though you do not have to go through with that plan). The second is to teach you smart financial management after you file to avoid getting into bankruptcy again. You will have to take both classes before the courts will discharge your debt. Otherwise, your case will close with the remaining debt, and you will have to start over to eliminate it.
How to fulfill the course requirement
You will need to receive the counseling from an approved nonprofit organization. The Office of the U.S. Trustee has a list of approved credit counseling agencies in Florida. Taking the courses costs money, but if you cannot pay, the agency will have to waive or reduce the fee based on your income. You can choose the type of course that works best for you. Your options may include the following:
- Individual classes
- Group classes
- Online courses with flexible pacing
- Audio format
- Foreign language format, such as Spanish
The first class is 60 to 90 minutes, and the second is two hours. They focus on education and do not include any tests. You will get a certificate after completing each class that you will need to file with the court.
Why you still need a bankruptcy attorney
Although you cannot meet the course requirements through an attorney, receiving legal assistance can still be a smart move. A lawyer experienced in Florida bankruptcy can guide you through the process of credit counseling to ensure you do it correctly and can help with filing the certificate and petition on time. An attorney can also answer your questions and advise you on whether or not to follow the agency's repayment plan. This assistance can save you from unnecessary fees and delays. Consult a bankruptcy lawyer to find out how to get started on credit counseling and bankruptcy filing.