Credit Counseling and Filing For Bankruptcy

Bankruptcy Lawyer Bryan W. Stone answers the question: “What are my alternatives to bankruptcy?”


Many people considering filing for bankruptcy protection lack information about the process. This is understandable given that most people filing for bankruptcy have never filed before and are thus totally unfamiliar with how the system operates. Someone with only passing knowledge might think that all a person needs to do is decide to file and fill out some paperwork and before you know it the bankruptcy is over and done. Sadly, there are many more steps along the road that must be navigated before reaching the desired conclusion. Thankfully, skilled bankruptcy attorneys are here to help guide the way.


Notepad Charlotte Bankruptcy LawyerOne such requirement that you may not be aware of is that before a bankruptcy petition can begin moving forward, the person filing must have completed an approved credit counseling class. In fact, the bankruptcy process requires the applicant to undergo two separate credit counseling workshops: one before filing and another before the bankruptcy can be officially discharged. Before the process can be wrapped up, you will need to attend the classes and receive your certificates of completion for both the pre-filing counseling and the pre-discharge counseling. The courses must be offered by an agency approved by the Executive Office for U.S. Trustees, the branch of the Justice Department responsible for overseeing the bankruptcy system.


So what happens in these counseling courses? The goal isn’t to scare you away from the bankruptcy process, the hope is to provide education for those considering bankruptcy and to ensure that those who made it through have the tools they need to succeed in the future and avoid similar financial issues. The pre-filing course makes sure you understand what bankruptcy entails and whether filing is right for you. Counselors will do a review of your financial situation and discuss alternatives to bankruptcy. They’ll also make sure you fully understand the consequences of filing and what will happen once the bankruptcy is finally discharged. The whole thing should last about an hour and ranges in price between $20 and $50.


For pre-discharge counseling, the goal is to put you on a sound financial footing for the future. Anyone who has been through bankruptcy likely wants to avoid having to go through it all a second time. The pre-discharge counseling is aimed at helping you do just that. The course discusses things like how to build a workable budget and how to manage expenses as well as explaining how credit scores work and what to do to rebuild credit while avoiding high levels of debt. The course should last around two hours and cost approximately the same as the first class.


Are there any ways out of the counseling requirement? Technically yes, but not many. You can avoid the pre-filing course in some special cases where you can show that you needed to file for bankruptcy protection immediately to avoid suffering substantial harm. Even in such cases, you will still have to complete the course within the first month after filing, but your extraordinary circumstances can buy you a bit of time. The only other ways to avoid the counseling are to show that you are either disabled or incapacitated such that you are not capable of understanding such a course or that you are an active duty member of the military who is unable to attend the course as you are in a combat zone. Other than those very narrow exceptions, everyone else will be required to spend the time to take the classes.


If you are contemplating bankruptcy in the Charlotte area, please call the skilled lawyers at Arnold & Smith, PLLC find additional resources here. As professionals who are experienced at handling all kinds of bankruptcy matters, our attorneys will provide you with legally sound advice for your particular situation.


About the Author

Kyle Frost Bankruptcy Lawyer Student loan attorneyKyle Frost joined Arnold & Smith, PLLC in 2013 where he focuses his practice on all aspects of civil litigation and bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord-tenant issues.

Born and raised in upstate New York, Mr. Frost attended the University at Albany on a Presidential Scholarship, graduating magna cum laude with a double major in Political Science and Sociology.  He went on to attended Wake Forest University School of Law in Winston Salem, North Carolina.

Following college, Mr. Frost spent over a year teaching English in South Korea. He worked in a private school in Seoul developing curriculum, English programs, and educating both children and adults that were interested in learning a new language.

In his spare time, Mr. Frost enjoys homebrewing, fishing, and travelling.





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