Pre bankruptcy credit counseling is required before you able to legally file bankruptcy according to 11 U.S.C. § 109(h)(1). In addition, you are required to take a post bankruptcy credit counseling class after you file; commonly referred to as post-filing debtor education class. You can not file until you take these classes and your bankruptcy can not be discharged until you complete your post bankruptcy or post education class with in 30 days of your meeting of the creditors. As a best practice you should take your post education class as soon as you file and before your 341 meeting (meeting of the creditors). The goal is to make the trustee’s job easier by having the class completed prior to your arrival at the 341 hearing.
How much do debt education classes cost?
The classes vary in the amount that is charged for the credit counseling certificate. These classes are not typically covered by your bankruptcy attorney fees. However, if you are trying to budget money for these counseling sessions saving a $100.00 should easily cover the total cost for each debt education class. The pre filing class will range anywhere from $35-$50, the post filing bankruptcy class will also range from $35.00-$50.00. If you are married and are filing together the fee should be the same and you should not have to pay to take separate classes. If the counseling agency tries to charge you; you should look for another course. Therefore, budgeting $100.00 dollars to take these classes should easily cover the cost associated with these federal mandated classes. There are exceptions to the rule if you can not afford to pay for the classes and you can apply to the court to receive a waiver of the fee if you can not afford the course.
What do you need to have before you take the credit counseling class?
You should pull a copy of credit report and see who is reporting to the credit companies. You are entitled to one free credit report from all three companies each year. The counseling company does not need this. However, if you are serious about filing you will want to do this anyway. The reason you want a credit report is before you meet with credit counselors you want to list all your debts and expenses you have. Therefore, having a spreadsheet with each creditors address, account number and the amount you owe the company. In addition, you will want to include monthly payments to each creditor. All of these questions will be asked by the counseling agency as well as the bankruptcy attorney you select.
Be aware of credit counseling agencies.
When you select a credit counseling agency they will compile all of your bills and do an analysis and give you there opinion on whether you should file bankruptcy or not. One of the things they will do is try to get you to work with them on a debt management plan or DMP. They will offer to talk to your creditors to get the balance or interest rates reduced. They will set up a program where you pay them and they will distribute the payments to the creditors. This could cause you more problems because they are notorious for not paying on time and causing you more problems. In addition, the work they can do like reducing interest rates or balances can be done by you and you will receive the official confirmation from the creditor rather than using a debt relief agency which could cause more problems.
Who offers Credit counseling for bankruptcy?
Several organizations offer these courses. Some of the more expensive credit counseling agencies ($50) allow you to take your courses online and verify your attendance over the phone and they will send a copy of your certificates to you and your attorney if they offer this service. However, the agencies must be an approved credit counseling agencies which is certified to offer these courses to be accepted by the bankruptcy trustee. You can select which places offer these services to your state by visiting the federal government’s website or by verifying our advertisers are authorized to provide bankruptcy certification
