Filing for bankruptcy can be tough and overwhelming, especially for those who are not familiar with the process. One crucial step in this journey is credit counseling, which is a requirement for seeking bankruptcy.
But what is credit counseling, and why is it vital? As you think about filing for bankruptcy, you may ask: How can credit counseling help me achieve a fresh start?
What is credit counseling?
Credit counseling is required for those filing for bankruptcy under Chapter 7 or Chapter 13. According to the law, individuals must complete their credit counseling from an approved agency within 180 days before filing for bankruptcy.
The benefits of credit counseling
Credit counseling can help individuals understand their financial situation. It can also help them identify areas for improvement and develop a plan to manage their debt. In addition, it can help them learn about the impacts of bankruptcy and explore other options, such as debt management plans or credit consolidation.
What to expect from credit counseling
During credit counseling, you can expect to talk about your financial situation, income, expenses and debt with a certified credit counselor. Then, the counselor can help you create a budget as well as a debt management plan. Further, they can guide you in managing your finances and improving your credit score.
The consequences of noncompliance
Meanwhile, failure to comply with the credit counseling requirement may result in the court dismissing the bankruptcy case. Thus, it is essential to take credit counseling seriously and seek counseling from an approved agency.
Aiming to achieve financial stability
Credit counseling is critical in helping individuals develop money management skills as they aim to achieve financial stability. As you go through bankruptcy, you might face challenges along the way. With legal counsel, you may receive guidance and support for protecting your rights during the entire bankruptcy process.
