Are Credit Counseling Sessions Required for Bankruptcy?

Most people filing for Chapter 7 or Chapter 13 bankruptcy must take two brief credit counseling sessions. A first session is required before filing, and it will help you determine if bankruptcy is your best option.

The second session is required after you file, but before debts are discharged. It will include information on responsible use of credit and budgeting.

4 Reasons You Should Not Fear Credit Counseling Sessions

Credit counseling may seem scary and intrusive, but it is easy and painless.

1. It is not time-consuming: These sessions may not require you to leave your apartment or house, and could take up to a half-hour. Most places allow you to take credit counseling over the phone or online. This process does not involve taking time off from work, driving somewhere far away, and sitting in a class for several hours.
2. It is cheap or free: Depending on your financial situation, credit counseling is inexpensive or free. People with limited income can receive waivers if they cannot afford to pay the fees. In other cases, people can pay reduced rates for services. For everyone else, counseling sessions may cost anywhere from $50 to $150.
3. You cannot fail: You cannot fail your credit counseling sessions. The law only requires you to participate.
4. Budget plans are not mandatory: You may find it obvious that your financial situation requires bankruptcy. Pre-filing credit counseling shows you other potential options, even if they are not feasible. You are not required to follow through with any budget plan given to you during credit counseling.

Places that offer these services must be approved by the Office of the U.S. Trustee. The Kansas City bankruptcy attorneys at The Sader Law Firm work with a certified credit counseling firm to provide this service for our clients.