Bankruptcy should be the last option for you when find no other alternative to pay down the outstanding debts. Filing bankruptcy is an important financial decision of your life that may affect your economic condition badly.
As such, it’s important that you know about the consequences of filing bankruptcy. You may seek help from a bankruptcy counselor to know more about this process. Bankruptcy counseling is offered to the individuals who face financial crisis so that they can understand their options in a better way and, in turn, get rid of debt problems.
Any individual thinking to file bankruptcy should know about the process properly. There are different chapters of bankruptcy that you can file. Each of them has different requirements and resulting consequences. Bankruptcy counseling will help the individual know if bankruptcy is the right decision for their situation. It may also help you find ways to avoid bankruptcy that created problem initially.
The Legal Requirement of Filing Bankruptcy
According to the FTC, credit counseling is needed for the individuals who want to file for bankruptcy from a government-approved association. This came as an outcome of the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act. The counseling should be completed at least 180 days before you may file for bankruptcy.
The Process of Bankruptcy Counseling
When you file for bankruptcy, a bankruptcy counselor will at first evaluate your present financial condition by taking into consideration your present income and outstanding dues. He will assess your expenses and savings to see where costs can be reduced. If he determines that you can file bankruptcy, he will evaluate your options with you. Also, make it a point to explain you the basics of bankruptcy chapters and how to go about filing for it. The counselor will also clarify how filing bankruptcy will affect your financial condition in future. The counseling session takes place either online or over the phone or in person. It will require roughly 90 minutes for completing the session and will costs about $50. Once you may complete the credit counseling session, you will be provided a certificate that will prove your session completion. Bankruptcy counselor is also known as credit counselor.
Different Kinds of Bankruptcy
The main kinds of bankruptcy are Chapter 7 and Chapter 13. With Chapter 7, you liquidate your assets that are not excused and make use of the money to repay your lenders. On the other hand, with Chapter 13, you make a payment plan to manage your debt with future income. Each kind of bankruptcy functions differently and has specific rules and regulations attached to it. The counselor will provide you proper advice in bankruptcy counseling session as to what kind of bankruptcy you need to file.
The Post-counseling Process of Bankruptcy
The government needs individuals who will check the education course of a debtor after filing bankruptcy. This can be done either in person, online or over the phone and must be completed by an approved provider. The main purpose of this counseling session is to help you handle your personal finances in a better way.
So, if debts are out of your control and you do not find any option to eliminate them, file bankruptcy and come out of debt burden as soon as possible. For more information on bankruptcy counseling visit here.