Credit Counseling Is A Must Before Submitting Bankruptcy Petition
Steps For Filing

After the enactment of the new bankruptcy law, every US citizen who files for bankruptcy has to go through a certified credit counseling course approved by the Department of Justice under the U.S Trustee Program. The struggling debtors can't just rush to a bankruptcy lawyer for discharging their debts. They need to complete the course successfully.

What should consumers know about credit counseling before they file for bankruptcy?
After the new bankruptcy law was put into effect, there is a sharp increase in the demand for credit counseling by the debtors filing bankruptcy so that their petitions are approved by the bankruptcy courts. As per the new law, individuals have to go through the credit counseling process before getting relief from all of his financial responsibilities. This creates an added pressure upon them. However, in one way, the new law is a blessing n disguise. This is because credit counselors analyze a person's financial circumstances before advising them to proceed with the bankruptcy petition.

In addition to the above benefits, a credit counseling session will enlighten consumers about the ways to manage their daily expenses within the realms of their income and teach them tricks to improve their credit score.

A standard credit counseling session should cover the following aspects of personal finance:

1. Certified financial planners must analyze a debtor's current financial condition.
   
   
2. The financial planners should develop a customized budget for the enrolled candidate.
   
   
3. The candidates should get to know about other debt relief options besides opting for bankruptcy.

The credit counseling courses are conducted in the following ways:

• Personal interview
  
  
• Group discussion
  
  
• Telephonic interview
  
  
• Online chat

If a person is unable to solve their debt problems even after getting credit counseling, then the person can approach bankruptcy attorneys for help.

The role of the credit counseling institutions
In the US, these institutions need prior approval from the competent authority to conduct credit counseling sessions. As already said, they conduct financial well-being classes for the debtors. They create repayment plans for the consumers to help them get out of the unsecured debts like credit card debts. However, they cannot promise consumers to relieve their secured debts like child support loans or student loans. An individual will have to repay these secured debts as per the terms and condition of the loan agreement. The financial planners/certified credit counselors find out whether or not a person should file for bankruptcy after studying his/her financial reports.

What are the enrollment fees for a
credit counseling session?
An individual contemplating bankruptcy as an option should get a certificate of completion from an approved credit counseling agency for a 90 minute course on credit counseling. The cost of this course must not go beyond $50. The credit counseling fees change due to various reasons such as the location of the debtor, the mode of delivery of the course and the ability to pay the counseling fees. An honest credit counseling agency will clearly state all the fees applied before starting the counseling course.

The credit counseling institutions are legally bound to provide counseling session to those people who cannot bear the cost of the service. For a debtor to get the fees waived for a counseling course, he should convey his inability to pay the fees in written to the counseling agency.

The credit counseling agency will provide a certificate within 24 hours of completion of the counseling course, without charging any extra fees for the same. This is not all; debtors have to go through the post-filing debtor education course before the bankruptcy process gets over.