Frequently Asked Questions

bankruptcy Information

 

  1. 1. What are the financial counseling and education requirements under the bankruptcy law?

  2. 2. What are the benefits of the pre-filing counseling session?

  3. 3. What takes place during the pre-filing counseling session?

  4. 4. What occurs during the pre-discharge financial education course?

  5. 5. How can consumers considering bankruptcy select a reputable credit counseling agency?

 

1. What are the financial counseling and education requirements under the bankruptcy law?

Financial counseling and education is mandated by the Bankruptcy Code. Prior to filing for bankruptcy, individuals are required to receive a briefing from an approved non-profit budget and credit counseling agency. Prior to completing the bankruptcy process and receiving a discharge, individuals are required to complete a course on personal financial management.

 

2. What are the benefits of the pre-filing counseling session?

For most individuals, filing for bankruptcy is one of the most serious financial decisions they can make. Consequently, that decision should be made only after knowing what the bankruptcy process entails, the consequences of filing for bankruptcy, and the available alternatives to filing for bankruptcy.

 

At confidential, one-on-one counseling sessions, our certified counselors assist you with all kinds of money-related issues from housing to debt, credit or bankruptcy problems. The information you receive at your session may be enough. If not, we offer other services that might be more beneficial, including workshops and self-help education.

 

3. What takes place during the pre-filing counseling session?

All individuals filing for bankruptcy under Chapter 7 or Chapter 13 are required to participate in a pre-bankruptcy filing counseling session with an approved non-profit budget and credit counseling agency within six months of filing. The agency providing the session must be approved by the Executive Office for U.S. Trustees (EOUST). (Agencies located in North Carolina or Alabama must be approved by the local Bankruptcy Administrator.)

Consumers who receive pre-filing counseling with CCCS can expect:

  • Estimated length of counseling session: approximately 90 minutes.
  • Content: The session will include an overview of the bankruptcy process; a discussion of possible alternatives to bankruptcy, including their advantages and disadvantages; and a personalized budget analysis. The session also will include a discussion of the circumstances that led the consumer into financial difficulty,
  • Format: Counseling can be face-to-face, over the phone or via Internet.
  • Certificate: Consumers will receive a certificate indicating that they completed the counseling session. Should they decide to file for bankruptcy, they will have to include the certificate in the filing with their bankruptcy petition. The certificate is valid for 180 days.
 

4. What occurs during the pre-discharge financial education course?

Before a bankruptcy is finalized and debts can be discharged, consumers are required to complete a pre-discharge financial education course from an EOUST (or Bankruptcy Administrator)-approved agency.

The pre-discharge financial management educational course provides practical financial information on how to manage money, keep personal finances in order and reduce the chance of future financial problems.

The following is an overview of what to expect from the pre-discharge education:

  • Estimated course length: two hours.
  • Content: CCCS will address financial literacy issues that will arm individuals with the tools to prevent future financial problems. Among key topics: rebuilding finances after bankruptcy, developing and following a budget, and understanding the wise use of credit.
  • Format: group sessions or via Internet.
  • Certificate of Completion – Consumers will be given a certificate verifying completion of the course, and will have to file that certificate with the Bankruptcy Court in order to have their debts discharged.
 

5. How can consumers considering bankruptcy select a reputable credit counseling agency?

Consumers intending to file for bankruptcy or waiting for debts to be discharged after filing will need to select an organization approved by the EOUST (or Bankruptcy Administrator) to provide such services.