Navigating the path through financial uncertainty can be scary. If you have accumulated too much debt and are unsure if you can financially recover, you may have considered bankruptcy. One of the first steps of filing for bankruptcy is acquiring a credit counseling certificate. This blog should help to clarify exactly what a credit counseling certificate is and when you may require one.
What is a Credit Counseling Certificate?
In order to file for Chapter 7 or Chapter 13 bankruptcy, consumers need to acquire a credit counseling certificate. Before you actually file for bankruptcy, the court will require you to get a certificate that proves you have gone through credit counseling. This certification must be issued by a non-profit credit counseling agency or debt relief company, like ACCC, that has been approved by the U.S. Trustees Office. Also known as a bankruptcy certificate, this course is meant to ensure the financial education of those filing for bankruptcy and to prevent future financial problems for those filing.
When Do I Need a Credit Counseling Certificate?
You must obtain a credit counseling certificate at two stages of the bankruptcy process. First, when you file for bankruptcy, and again after you file, but before your debts are discharged. The pre-bankruptcy credit counseling course takes about 60 to 90 minutes to complete and focuses on bankruptcy and other ways possible ways to eliminate debt. During that time you will receive counseling regarding:
- Your personal financial situation and a review of your current financial buying habits and goals
- Setting up a personal budget plan
- Discuss various debt options including bankruptcy
After your pre-bankruptcy credit counseling, you will receive your first certificate. This credit counseling certificate will remain valid for 6 months, if you choose to move forward. After completing this step and officially filing for bankruptcy, consumers must take a bankruptcy debtor education course. This second course focuses on educating consumers on future money management and consumers must take it after filing. Before discharging any debts, consumers must complete this course.
Consumers must file the credit counseling certificate for the post-bankruptcy debtor education:
- Within 45 days after the creditors meeting for Chapter 7 cases
- 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 for Chapter 13 cases.
Obtaining a credit counseling certificate is an important step to improve your finances. As always, consider all of your options towards debt relief to be sure you are making the best decision for you and your financial situation.
If you’re struggling to pay off debt, ACCC can help. Schedule a free credit counseling session with us today.