Bankruptcy must be considered with complete awareness of all its consequences.
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Declaring Chapter 13 or chapter 7 bankruptcy is not a small decision, for some it may be a best option to be debt free when you see no other option of paying off your debts.
Bankruptcy is a long, confusing and hectic process; it takes months just to file it. The federal government requires two sessions of credit counselling:
• Pre-filing counseling to kick off the process
• Pre-discharge counseling before your debts are forgiven.
Every person who decides to declare bankruptcy has to go through pre-filing counselling before submitting your case to court, otherwise it will be thrown out.
Each person that seeks assistance has a unique financial situation. During your pre-filing bankruptcy counseling session, a certified credit counselor will work with you one-on-one to develop a detailed personal financial assessment to help you in your financial goals. Pre-filing counseling also presents alternatives such as debt management to help you determine whether bankruptcy is the best way to resolve your debt or not.
When you are finish with your pre-filing session, you will receive a certificate of pre-filing completion valid for 180 days. Which you’ll use if you decide to file for bankruptcy.
It is the last step before the court finalizes your bankruptcy and discharges your debts.
The pre-discharge education course covers a variety of financial and budgeting topics, assuring you have the tools necessary to build a strong financial foundation.
This class covers much of the same ground as the pre-filing session but with a focus on increasing your financial literacy. You will also discover how to set achievable financial goals, calculate your net worth, create a livable budget, and build a savings plan.
As with pre-filing counseling, you’ll receive a certificate upon completion. You’ll need to have that certificate before the court will discharge your debts.
Cost of pre-filing and pre-discharge courses
The bigger the company, the bigger the cost. Average cost for pre-filing and pre-discharge courses is $25 to $50 each, depending on where and how you do the counseling.
But there are many counselling agencies who will waive your fees if they determine you can’t pay given your household budget.