Credit Counseling Obligation Prior To Filing Bankruptcy

Charlotte Bankruptcy Lawyer Bryan W. Stone of Arnold & Smith, PLLC answers the question “What are my alternatives to bankruptcy ?”

Many people in North Carolina who might be considering filing for bankruptcy may not realize that before you are allowed to file for either Chapter 7 or Chapter 13 you must first complete a credit-counseling workshop. Additionally, before you can have your debts discharged, debtors are also required to complete a debtor education course designed to teach important financial management skills.


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According to the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act, every person who files for bankruptcy must first undergo mandatory credit counseling within a 180-day period before they can officially file. The law says that the credit counseling must be conducted by a Bankruptcy Administrator-approved organization.


These sessions often last between 60 and 90 minutes and can take place in person, on the phone or even online. The counselor will likely inform you of your options other than filing for bankruptcy and will use your income and debts to see if there are any other ways of tackling your debt burden.


The good news is that all credit-counseling organizations are required to offer their services for free if you cannot afford to pay the usual $50 fee. Finally, when your counseling session is complete you must get a certificate as proof to ensure you receive credit for participating. 

Debtor Education


The obligation to attending credit counseling occurs prior to filing for bankruptcy while the obligation to attend a debtor education course occurs after filing, but before your debt can be discharged.


Just like credit counseling, you must use an approved organization that will then give you a certificate of completion when the program is over. Also like the credit counseling requirement, organizations must waive the fee if you are unable to pay. Unlike credit counseling, which deals with life before filing for bankruptcy, debtor education programs are meant to prepare you for life after bankruptcy. The courses include lessons about managing money, using credit wisely and how to avoid filing bankruptcy in the future.


If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.



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