What to Expect During Pre-Bankruptcy Counseling

Posted on in Personal Bankruptcy

Illinois bankruptcy attorneyWhen filing for bankruptcy in Illinois, you are required to complete online credit counseling before your petition can be filed with the bankruptcy court. This is a mandatory part of the bankruptcy process, and you will be issued a completion certificate that must be included among your other bankruptcy documents being filed. The following provides some basic information about obtaining this counseling, answering some of the common concerns that clients often have.

About Pre-Bankruptcy Credit Counseling

The Federal Trade Commission (FTC) advises consumers that in order to take advantage of the protections offered through bankruptcy, they must complete a credit counseling course within 180 days prior to filing. It is used to help determine whether you are a good candidate for bankruptcy, or whether your debt issues could be resolved through some other means.

A counseling session typically lasts between 60 and 90 minutes, and may be conducted in person, by telephone, or online for your convenience. Prior to your session, you will need to collect information about your income and bills, including credit cards, mortgages, loans, and other types of debts. As part of your session, pre-bankruptcy counseling generally includes the following:

  • An evaluation of your current financial situation;
  • A discussion of the alternatives to bankruptcy which may be available;
  • Information on establishing a budget so that once your bankruptcy is completed, you can avoid falling into the same type of debt problems.

Pre-bankruptcy counseling is required for both individuals and businesses, regardless of the type of bankruptcy you are filing. Once you have completed counseling, you will be issued a certificate which is used as proof for the bankruptcy court. It is recommended you do the counseling at least several days before intending to file, to allow time for the certificate to be issued. It is important to choose a provider approved by the bankruptcy court and its Trustees. The fees for counseling are generally in the vicinity of $50 or less, and some counseling providers offer to waive or reduce the fee based on your income. You can obtain a list of court approved pre-bankruptcy credit counseling providers in Illinois by visiting the U.S. Justice Department website.

Pre-bankruptcy credit counseling should not be confused with post-debtor education, which is required after you have filed and before your bankruptcy is completed. The FTC advises that this is also available either in person, via phone, or through online courses, often through the same company that handled your credit counseling. Debtor education generally lasts two hours and includes information on managing money, living on a budget, and using credit wisely.

Reach Out to Us for Help

Call or contact the Law Offices Of Eric G. Zelazny online and request a free consultation if you have questions about bankruptcy and to find out if it could help resolve your credit and debt collection problems. Our passionate Tinley Park bankruptcy and debt relief attorney has more than 20 years experience helping both individuals and business owners in these types of situations and can advise you on the best course of action in your particular case.





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Chicago, Illinois 60602
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