Understanding Bankruptcy Counseling

If you have to file for bankruptcy, there are important steps that must be taken before you are allowed to officially file. Bankruptcy counseling is an important and required step in the process. Understanding bankruptcy counseling helps move the process along more smoothly.

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The Bankruptcy Abuse Prevention and Consumer Protection Act requires consumers to complete a prefiling session. The counselor will typically begin by asking about your individual financial goals, as well as asking permission to get a copy of your credit report.

From here, you will need to work with your counselor to develop a spending plan and a full balance sheet. These help you to grasp the money you have, as well as the money you have come in every month and what it needs to be allocated to.

From here, your counselor will create an action plan. This plan is long and short-term goals to help you gain control over your finances. In addition to this, they will also give you a bankruptcy packet and a certificate of participation. These forms will help you with the filing process if that is the next step that must be taken.

For additional information on bankruptcy counseling, please review the attached video.


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