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What is the role of credit counseling in a personal bankruptcy?

Escondido residents who decide that filing for bankruptcy is the right move at the time due to their financial complications will likely have many different questions about the process. For some, the main concern is what assets they will be required to give up to satisfy the debts owed. For others, the main concern will be how they will move forward in a financially responsible manner once the personal bankruptcy process is complete. But, one thing that everyone who files for bankruptcy should know is the requirements that must be met to successfully complete the bankruptcy process. One requirement is credit counseling.

What is the role of credit counseling in a personal bankruptcy? Well, first and foremost it is important for Escondido residents to know that attending credit counseling before a bankruptcy filing is mandatory. This can give bankruptcy filers a better idea of how they arrived at a situation where their debt burden is overbearing, and it may provide an opportunity to discover a path forward that doesn't include a bankruptcy filing.

Once credit counseling is complete, Escondido residents can proceed with the bankruptcy filing. But, the information phase of the process isn't complete at that point. Once the bankruptcy action is filed, the bankruptcy filer will be required to attend debtor education sessions. These informational sessions can provide useful tips for bankruptcy filers to ensure that their finances never reach the tipping point again.

Escondido residents who are facing financial challenges may find it beneficial to consider the pros and cons of a Chapter 7 bankruptcy filing. Such a filing can allow Escondido residents to discharge debt that has become an all-consuming point of concern in life.

Source: uscourts.gov, "Credit Counseling and Debtor Education Courses," Accessed Dec. 18, 2016

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