Christopher Todd
Morrison, P.C.

Christopher Todd Morrison, P.C.

Affordable Bankruptcy
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What is credit counseling in bankruptcy?

Whether you file for Chapter 7 or Chapter 13 bankruptcy, you can expect to undergo pre-bankruptcy credit counseling. This is an important step in the bankruptcy process. You may file for bankruptcy, but a court will not accept your petition if you do not complete a credit counseling session within 180 days before you file. 

As the FTC explains, the U.S. Trustee Program must approve the credit counseling organization that you go to. Once you have identified a suitable organization, you can contact the counselor to arrange a session. 

How credit counseling works

A credit counseling session is not hard to understand. You will sit down with a credit counselor for a period of around 60 to 90 minutes. The counselor will go over your specific financial situation. From there, the counselor will talk with you about different ways to resolve your debt other than bankruptcy. You will also likely discuss how to budget your finances. 

Flexibility to help your situation

If you are on hard financial times, you might not be able to pay the fee required for counseling. Fees vary but usually people pay $50 for a session, depending on the kinds of services offered by the counselor and where the counseling takes place. However, if you cannot pay the fee, you may ask the counselor for a fee waiver in advance of the counseling session. Be aware that the counselor should talk with you about any fees before the session. 

Driving to the counseling location or arranging transportation might be an issue for you. If so, be aware that you do not have to be in the same room with your counselor during the session. You may arrange to do the session over the phone or through an internet connection. 

Producing a certificate

To show that you have finished your counseling, you should acquire a certificate from the counselor so you can file it with the court. Your certificate should have its own number, with a central automated system producing it to prevent fraud. Do not worry about having to pay more for the certificate. A credit counseling organization cannot require an extra fee just for the certificate.