A mandatory step during a bankruptcy filing is the completion of a U.S. Trustee certified credit counseling course. Many people worry about this –is it a test? A class they must attend? I have even had one client ask if the credit counseling is a punishment!
It’s none of the above.
More than anything, the credit counseling is an informational exercise. It’s for debtors to answer some questions about their situation, input their numbers, and take stock of all the options available to them. Many companies offer the course for a variety of fees –make sure the course is approved by the U.S. Trustee if you are researching options on your own.
When you are taking a credit counseling course, expect it to take 60 – 90 minutes. If taken online, most times you can save your progress and come back to it if necessary.
Approved credit counseling courses will cover an evaluation of your specific situation, a budgeting exercise, possible alternatives to filing bankruptcy, and a repayment plan exercise.
First and foremost, the course is going to ask you for numbers –income, expenses, assets. Keep in mind what I said earlier: this isn’t a test! Estimates are a-ok. Having a recent paystub and a list of bills can be very helpful when filling out this portion to get the most out of the course.
Next the course will take you through creating a monthly budget. This will evaluate and categorize your expenses, offer tips on where you may be able to save, and help adjust your budget.
If you’ve gotten far enough in the bankruptcy process to take a credit counseling course, chances are that filing for bankruptcy is your best option. But, the courses are required to take you through alternatives to filing and the possible creation of a repayment plan.
Overall, the credit counseling course is a requirement of filing bankruptcy. It can also be a valuable tool for future budgeting, debt management, and can provide tips on finances for your fresh start.
Conclusion
When you are ready to talk over your debt management choices, go to www.kainscott.com to request a bankruptcy consultation and weigh your options! We’re MN’s OLDEST bankruptcy law firm.
