Bankruptcy Consumer Counseling

In April 2005, the Bankruptcy Reform Bill was signed into law by President Bush. The law became effective on October 17, 2005 and provided a new law that requires consumers that file for bankruptcy and consumers in bankruptcy suits to take bankruptcy consumer counseling. This counseling is designed to provide individuals with the information that they need to avoid filing bankruptcy in the future and how to avoid deep debt in the future.

Bankruptcy consumer counseling is designed to fulfill credit counseling requirement and pre-discharge education classes that are required by law. There are a number of topics that are covered by bankruptcy consumer counseling and each of these are chosen as important areas that are believed to need cover to assist people in avoiding future debt and bankruptcy. Bankruptcy consumer counseling sessions typically educate individuals on:

• Options available for getting out of debt
• Building a personal budget
• The different types of bankruptcy
• Who can file bankruptcy
• Which debts you can be forgiven for through bankruptcy
• The role of an attorney in a bankruptcy case
• Automatic stays
• The role of the U.S. Trustee
• Building your credit after bankruptcy
• Developing an action plan for and after bankruptcy.

You may be required to take this course prior to filing bankruptcy or after filing for bankruptcy. These courses teach you about whether or not you should file bankruptcy as well as what will happen to your debt, belongings, assets and credit after filing bankruptcy. Through these courses you may learn that you have a way to get out of debt without filing bankruptcy and that bankruptcy should be your last option when in debt.

Bankruptcy consumer counseling cannot legally tell you whether or not to file for bankruptcy, but it is designed to show you what options are available to you.