Before you can file for Chapter 7 bankruptcy, you will need to prove that you have a good reason. Every filer now has to take a class that involves an evaluation of your financial situation before your bankruptcy bundle can be accepted in federal court. To get an idea of what to expect with this class that could create problems with your filing, read on.
The Most Important Thing to Know About the Credit Counseling Class
This class is not so much an educational experience as it is a hurdle for filers to jump through before they can file. The bankruptcy code underwent an update several years ago in an attempt to cut down on filers who might have been able to pay their debts without filing for Chapter 7. This resulted in a number of measures that created more checks and balances on filers. This is a class you must pass before you can file.
What Really Happens As a Result of the Credit Counseling Class?
This class consists mainly of consumers filling out some budgetary paperwork and then submitting that to an approved credit counseling agency for review. The budget is a listing of all your bills, and those numbers are compared to your income. Most people about to file for bankruptcy may be embarrassed about their finances. This, however, is not the time to leave off any debts. You must show the credit counseling agency that you are unable to pay your current bills and have no alternative but bankruptcy.
Details to Know About the Class
This class can be taken at any time up to 180 days before you file, and the certificate you receive when the class is complete has to be filed with your other bankruptcy paperwork. There is a charge for this class, but filers who show a need can apply for a waiver to eliminate or reduce the fees. The bankruptcy courts control the fees, but they vary around the country and should not exceed $50.00.
You can find a list of approved agencies to work with by accessing information on the Department of Justice website. A wide variety of options exist when it comes to taking the class, which can be done online, in-person, by phone, or by mail. Most of the time, filers can expect to spend around an hour creating the budget for the class.
Speak to a bankruptcy attorney to find out more.Share