Choosing A Credit Counselor
If youre looking for credit counseling to fulfill the bankruptcy law requirements, make sure you receive services only from approved providers for your judicial district. Check the list of approved credit counseling providers online or at the bankruptcy clerks office for the district where you will file. Once you have the list of approved organizations, call several to gather information before you pick one. Some key questions to ask are:
- What services do you offer?
- Will you help me develop a plan for avoiding problems in the future?
- What are your fees?
- What if I cant afford your fees?
- What qualifications do your counselors have? Are they accredited or certified by an outside organization? What training do they receive?
- How do you keep information about me confidential and secure?
- How are your employees paid? Are they paid more if I sign up for certain services, if I pay a fee, or if I make a contribution to your organization?
Fill Out The Credit Counseling Fee Waiver Application
After you have created an account and provided some basic information, you will come to a page entitled âFirst Course-Fee Waiver Eligibility.â This page will ask if you would like to apply for a fee waiver. Select the option for a fee waiver request and .
The questions on the application mostly revolve around your income and your household size. Try to have two paycheck stubs available and your W2s from last year. If you are on a fixed income, find your social security award letter, unemployment earnings letter, or other document showing how much you get each week or month. The application will also ask about any assets you may have, such as checking and savings accounts, cars you own free and clear, jewelry, furniture, and cash. You will have to list the value of each of those items as part of your fee waiver application. You will have to do this again when preparing your bankruptcy forms, so be sure to keep track of the information and you wonât have to figure it out all over again later.
Paying For Debtor Education
Expect to pay a course fee ranging from $5 to $50, depending on the provider. Most providers offer a fee waiver or fee reduction for applicants whose income is below 150% of the Federal Poverty Level for the household size. You can find these numbers at the U.S. Department of Health and Human Services.
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Bankruptcy Con: Damage To Your Credit Score
Nothing affects your credit score worse than filing for bankruptcy. The bankruptcy will remain on your credit report for 7-10 years and will affect your ability to borrow money on a credit card, for a mortgage, and to finance an automobile. If you do file, find out how to rebuild your credit after bankruptcy.
After Filing: Debtor Education
Before you have your debts discharged, but after you file for bankruptcy, you are required to complete an approved course on consumer debt. They may also be referred to as “providers or personal financial management instructional courses.” These courses usually cover the following topics:
- Developing a budget
- Using credit responsibly
As with pre-bankruptcy credit counseling, you may attend debtor education courses in person, over the telephone, or online. These classes usually take about two hours to complete and cost between $50 and $100, but the fee may be waived if you can’t afford it. Also, as with pre-bankruptcy counseling, you will receive a certificate to use as proof.
See the DOJ’s list of approved debtor education providers to find one near you.
What Is The Post
After you have filed for bankruptcy, but before you have your debts discharged, you will also be required by law to undertake and complete an approved post-filing debtor education course.
In this course, a counselor will discuss you with you how to develop a budget, how to manage your credit, and how to manage money properly. As with the credit counseling course, these classes last a minimum of 2 hours and can be conducted in-person, online, or over the phone.
You are required to have a case number before you can sign up for the course. You will receive the case number from your attorney or from the bankruptcy court after your bankruptcy has been filed with the court, and the case number has been assigned. The fee for this course might also be waived upon request if you prove you are unable to afford it.
You will also receive a certificate of completion upon completing the course to prove to the courts and the government that you took it.
Finish The Debtor Education Course On Timeand Prove It
Once that is completed successfully, you are required to participate in a financial management course within 60 days following the debtors meeting of creditors. This course reviews household budgeting and bill paying techniques to set you up for success in the future, so you dont wind up in need of bankruptcy in the future. You will need your case number and filing district to be able to sign up online for the course. This is the course that BE Adviser offers, and you can sign up for an account here.
While it sounds like a simple Personal Finance 101, it is one of the most important elements of your bankruptcy proceedings, since you will not be granted a discharge of your debts if your lawyer has not successfully filed your certification of completion of the course with the courts. Just as important as taking the class, however, is making sure your lawyer files your certification of completion with the courts within the allotted time frame.
If the certificate is not filed, your case could be closed without a discharge, and youll be back where you started. Without the discharge granted, creditors may continue to demand payment, even though you have filed a request for bankruptcy, and your case may be closed.
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How Do I Fill Out A Fee Waiver For The Credit Counseling Course
Generally, the credit counseling agency that you decide to use will ask if you want to apply for a fee waiver. If yes, the credit counseling agency may ask for items such as proof of income, a completed budget worksheet, and a completed application. This information will determine if your request for a fee waiver will be approved by the agency. If the fee waiver is approved you will then be provided with the free credit counseling course. Some steps explained in more detail below can help you with fee waiver process in general and familiarize you with the site for one of the approved credit counseling agencies, DebtorCC.org.
What If Theres An Emergency
If you need to file bankruptcy immediately to avoid an impending disaster like a foreclosure or wage garnishment, you could seek to avoid taking the credit counseling course. In that case, you must have contacted the credit counseling agency, been unable to complete the course in under a week, but needed to finish filing for bankruptcy in less time than that.
This circumstance, however, is merely a time extension, not a true exemption, It does not mean that you never need to take the course, just that you may do so after filing for bankruptcy, and even then youve only got 30 days to complete the course.
This kind of a situation would occur if your creditors have gotten far enough along in their pursuit of payment where they are ready to start garnishing your wages within the week, and you simply cannot afford not to be paid. In this case, you would need to get ahold of your nearest, quickest credit counseling provider that is approved by the US Trustee and begin the course, and not be able to complete it before your bankruptcy needs to be approved to prevent the garnishment.
Again, this would be very unlikely because the course usually only lasts an hour and a half. If you have had time to contact your lawyer, file all the paperwork, and get to court for the creditor meeting, you probably can find an hour and a half to finish this one last piece of the bankruptcy puzzle.
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Along The Way Ethel Dedicated Herself To Building Better Financial Habits
Consolidated Credit also provided her with a range of financial education resources and financial coaching. And unlike the bankruptcy requirements, all the education was free. It was also personalized.
This was the best program of financial learning I ever experienced.
Anytime Ethel had a question or was having trouble with her budget, she says the team was there to help.
They are caring people and willing to help in your situation, she says. They are only a phone call away.
Ethel is happy to report that shes learned how to save and how to not get back into debt. Instead of telling her to just stay away from credit cards, they showed her how to have a healthy relationship with credit.
I have three cards now, she admits. But when I use them, I am careful not to purchase more than I can pay off in the next statement.
What Is The Bankruptcy Counseling Requirement
Before filing bankruptcy in Jacksonville, youre required to complete credit counseling. The Federal Trade Commission states that you must complete this credit counseling from a government-approved agency within 180 days of filing. You must also complete a debtor education course after filing in order for your debts to be discharged.
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How Youll Do It
Pre-filing counseling and pre-discharge education are available only from nonprofit credit counseling agencies approved by the Department of Justice.
Look through the approved agencies and talk with a few credit counselors to find one you feel comfortable with.
Dont worry if you dont find an approved agency near you most pre-filing and pre-discharge sessions take place over the phone or online. Some agencies, like Clearpoint, do pre-discharge sessions only online.
Before going into either session, gather documents that outline your income, expenses and debt to expedite the process. Expect each session to take between 90 minutes and two hours.
You Must Take The Credit Counseling Session From An Approved Provider
The credit counseling session must be taken from an approved, nonprofit provider. CC Advising is approved in all U.S. States and territories, and not every provider is, so you definitely want to check to see whether the provider you choose is approved, either by the US Trustees office or by the Bankruptcy Administrators .
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Approval Process For Credit Counseling And Debtor Education Courses
In Alabama and North Carolina, the bankruptcy administrator approves credit counseling and debtor education providers. Lists of approved providers for the six judicial districts in Alabama and North Carolina are maintained by the bankruptcy administrator for that district or bankruptcy court.
An entity seeking to become an authorized credit counseling or debtor education provider in Alabama or North Carolina must go through an application process administered by the bankruptcy administrator for that district.
What Our First Bankruptcy Course Offers
The First Bankruptcy Course is only $19.95 per household.
The first bankruptcy course is available 24 hours a day, 7 days a week. You can take the course at your own convenience and at your own pace.
The course is easy to navigate and very informative. Remember, this is a no-fail course you cannot fail the course.
This is a 1-hour timed course, as required by law. You are not required to complete the pre-filing bankruptcy credit counseling in one sitting. If you log off mid-course, upon signing back in, it will resume from where you left off.
Your certificate will be emailed to you upon completion of the course. The certificate is available immediately after you complete the course and speak to a live counselor and is your proof of credit counseling certification.
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Potential Loss Of Assets
Filing for bankruptcy can delay home foreclosure and car repossession, but eventually, some property loss is possible. In Chapter 7 bankruptcy, nonexempt assets are liquidated to compensate your creditors. And while Chapter 13 bankruptcy lets you keep your assets while making payments on an adjusted debt plan, if you default on your repayments, those assets may be at risk.
Why You Must Take Pre
The counseling agency usually prepares a budget based on your income and expenses, and then review your options for repaying the debt. In most cases, the agency confirms that you don’t have any feasible options for dealing with the debt other than filing for bankruptcy.
Bankruptcy law requires only that you participate in the counselingnot that you go along with whatever the agency proposes. Even if a repayment plan is feasible, you aren’t required to agree to it. However, if the agency does come up with a plan, you must file it along with your other bankruptcy documents.
When the Court Agrees With the Agency’s Plan
If it’s clear from the documents you file that you could complete the repayment plan proposed by the agency, the court might use this as a reason to question your Chapter 7 filing and try to push you into a Chapter 13 repayment plan. If that happens, you’ll have an opportunity to explain why you shouldn’t have to repay all of your debts.
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Ontario Credit Counselling Services
When you are looking for debt solutions in Ontario, credit counselling presents one of the options available to you.
A credit counsellor will help you to look at your finances and explore debt solutions and alternatives to bankruptcy.
If you are searching for credit counselling in Ontario, you can discover non-profit organisations that offer you debt relief services.
Need Help Reviewing Your Financial Situation?Contact a Licensed Trustee for a Free Debt Relief Evaluation
Speaking with a credit counsellor can immediately make your financial situation better.
Bankruptcy Pro: Get Out Of Debt Faster Without Debt Forgiveness
One of the advantages of a Chapter 7 bankruptcy is that you can start over quickly sometimes in a matter of a few months with a clean slate. Your debt is forgiven. Not everyone qualifies for Chapter 7 bankruptcy, but if you do, you can essentially have your debts wiped away and rebuild your finances with a debt-free start.
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What It Costs
The average cost for pre-filing and pre-discharge courses is $25 to $50 each, depending on where and how you do the counseling.
Most of the bigger credit counseling agencies, such as ClearPoint and Money Management International, charge a flat rate of $50 per session. But some states cap the fee for pre-filing counseling at $20, and some agencies offer lower fees for online sessions. For instance, InCharge Bankruptcy Counseling charges $25 for pre-filing counseling online and $15 for its online pre-discharge course.
Many credit counseling agencies will waive the fees if they determine you can’t pay given your household budget. Be sure to get any fees in writing before starting a pre-filing or pre-discharge session.
What Is A Pre
If you already have filed for bankruptcy, you must complete a separate debtor education course before the debts are discharged. The course teaches money management skills to help you avoid a second visit to bankruptcy court. It covers areas like budgeting, responsible use of credit, money management and dealing with financial emergencies.
The classes cost from $50 to $100 and take about two hours to complete in person, by phone or online. You will receive a certificate to prove youve completed the course. The DOJ also has a list of approved organizations providing this counseling at .
There are deadlines for filing the certificate for post-bankruptcy education depending on which type of bankruptcy is involved. For Chapter 7 cases, it must be filed within 45 days after the creditors meeting. For Chapter 13, it must be filed no later than the date of your last payment in the repayment plan or the date of the filing for the motion for a discharge.
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Can I Complete Credit Counseling For Bankruptcy Online
Yes, in fact, most counseling sessions occur online or over the phone or both. The sessions usually take about an hour.
For example, InCharge Bankruptcy Solutions offers Pre-file Credit Counseling that begins online. The next step is a personal counseling session by telephone to talk about your current financial situation. A certified financial counselor will help you develop an accurate picture of your situation and provide specific advice on how to improve.
Youll discuss short- and long-term financial goals and determine if there are any alternatives to bankruptcy. If bankruptcy is necessary, the counselor will explain its effects and provide steps you can take to get back on sound financial footing.
Those entering credit counseling must use organizations approved by the U.S. government. A list of approved credit organizations can be found online at .
The U.S. Trustee Program responsible for approving such organizations does not operate in North Carolina or Alabama. In those states, bankruptcy administrators approve such organizations.
What Is The Purpose Of Credit Counseling
The first credit counseling session is generally required to be completed prior to filing for bankruptcy. Many clients take our course before they even meet with a bankruptcy attorney. However, there is no requirement that you have to be considering bankruptcy or that you file bankruptcy in order to take our course. Our counselors make no assumptions that you will necessarily be filing for bankruptcy. Our course is available to anyone in financial trouble, or to anyone who simply wants to learn more about their finances.
Your particular financial situation is reviewed by a certified credit counselor. They take a look at your debt to income ratio, your budget, your debts and assets, and review with you any and all possible alternatives to resolve your debt issues that may be available in your particular circumstance. Specifically, the counselor will be analyzing your current financial situation, discussing the factors that caused that financial situation, and assist in developing a plan to respond to those financial problems without incurring negative amortization of debt.
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