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Bankruptcy and Credit Counseling

December 12, 2014

Macomb County Bankruptcy Attorney Confirms Learning About Credit is an Important Part of the Bankruptcy Process

Just one medical emergency or major home repair can put a financially-responsible individual in a devastating financial situation. Even people who devote their lives to saving and carefully planning all expenditures can suddenly face unexpected debt from time to time. Once they give their last dollars to the hospital that saved their lives or the contractor who kept their homes intact after heavy snows threatened their roofs, keeping their families fed and clothed suddenly becomes a major burden.

When bankruptcy reform took place in 2005, credit counseling became a part of the filing and discharge of debt process. Yet many people believe that an emergency financial situation does not mean they need a credit education.  An experienced bankruptcy attorney can help free individuals from debt, and the required credit counseling education and tips can be very helpful to one’s financial future and financial planning.

Pre-Filing Bankruptcy Counseling Requirements: The Budget Briefing

Individuals will be required to obtain a “Certificate of Counseling” (also known as a Budget Briefing) from an approved credit counseling agency.  This course can easily be taken online or over the phone.  You will be asked questions about your current expenses, current debt and income.  The briefing and compilation of the information provided will reveal whether a debt repayment plan was or was not prepared.  The certificate will be required in order to file your bankruptcy. According to the Federal Trade Commission (FTC), the counseling should include the following:

  • Evaluation of the consumer’s specific financial circumstances
  • Any alternatives to filing bankruptcy, if applicable
  • Personal budget plans

It is helpful to gain an analysis from an outside third party, but in the end, individuals still need to make their own decisions on how to proceed.

Post-Filing Bankruptcy Counseling Requirements: Financial Management

Once the bankruptcy petition had been filed and a case number has been assigned, debtors will then be required to obtain a second certificate known as a “Certification of Debtor Education,” which is also known as personal financial management course. This post-filing debtor education certification can be done on the Internet or over the phone.  It offers information on developing a budget, money management and using credit wisely. Of course, when consumers receive support from an experienced Macomb County bankruptcy law firm, the attorney will make sure they meet this requirement and obtain this second certificate which is needed to successfully emerge from bankruptcy.

A Macomb County Bankruptcy Attorney Can Help Put the Pieces Together

At times, the knowledge gained from pre-bankruptcy credit counseling can raise more questions than answers. You may have more than one alternative to filing bankruptcy, but you do not have a crystal ball that tells you which alternative will leave you in the best financial shape. This is why it is so important to hold off on decision-making until you seek legal advice. A knowledgeable attorney can help sort out the details and point you toward the path that is most likely to lead to financial success.

At the Law Office of Jeffrey J. Randa, we offer a free initial consultation to help clients find the most beneficial solutions to their specific financial circumstances. Even before clients go in for credit counseling, we can help them find the counseling service that may best meet their needs and explain what to expect from the process. Call us at 586-228-6523, or use our convenient contact form to get started.

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