How Is The Pre-Filing Credit Counseling Completed?

Before you can file for bankruptcy, you’re required to complete a pre-filing credit counseling session. This requirement is designed to ensure you understand all of your debt relief options and the consequences of bankruptcy. Here’s how the pre-filing credit counseling process is typically completed:

Find an Approved Agency:

You must complete the counseling with an agency approved by the U.S. Trustee Program. The list of approved agencies is available on the U.S. Department of Justice’s website. It’s crucial to ensure the agency is approved in the judicial district where you’ll be filing for bankruptcy.

Choose the Counseling Format:

Most agencies offer counseling sessions in various formats, including in-person, over the phone, or online. Choose the format that is most convenient and comfortable for you.

Schedule and Attend the Session:

Once you’ve selected an agency, schedule your counseling session. The session typically lasts about 60 to 90 minutes. You’ll need to provide information about your income, expenses, debts, and assets.

Participate Actively:

During the session, a credit counselor will review your financial situation, discuss potential alternatives to bankruptcy, and help you develop a personal budget plan. It’s important to engage actively and ask questions to get the most out of the session.

Receive Your Certificate:

Upon completing the counseling, you’ll receive a certificate of completion. This certificate is required when you file your bankruptcy petition. Be sure to keep it in a safe place, as you’ll need to submit it to the court.

File the Certificate with Your Bankruptcy Petition:

When you file your bankruptcy petition, you must include the certificate of completion from your credit counseling session. Without this certificate, the court may dismiss your bankruptcy case.

Example Scenario:

John is considering filing for Chapter 7 bankruptcy. He searches the U.S. Trustee Program’s website and finds an approved credit counseling agency in his area. John opts for an online session due to his busy work schedule. During the session, he provides details about his financial situation, and the counselor helps him understand his options and creates a budget plan. After completing the session, John receives a certificate of completion, which he files along with his bankruptcy petition.

Pre-filing credit counseling is a mandatory step in the bankruptcy process, designed to help you make an informed decision about whether to proceed with bankruptcy or explore other debt relief options. Completing this requirement thoughtfully can provide valuable insights into your financial situation and help you take the first step toward regaining your financial stability.