Pre-Bankruptcy Credit Counseling
In 2005, Congress added a new requirement to the bankruptcy process which forces bankruptcy applicants to receive credit counseling from an approved agency within 180 days prior to the filing. There are a few very rare exemptions to this requirement, and you can expect to be required to fulfill this obligation prior to being permitted to file for Chapter 7 or Chapter 13 bankruptcy. As a necessary part of the bankruptcy process, it is important that you understand your responsibilities in order to move forward as quickly and effectively as possible.
At the Russell Van Beustring P.C., our legal team understands that moving through the process of a bankruptcy can be overwhelmingly complex, and we work diligently to help our clients make the most of the tools and resources available to them for debt relief through the court system. To learn more about the pre-bankruptcy credit counseling requirement and any other issues, call an experienced Houston bankruptcy attorney today at 713-973-6650.
Reasoning behind the Requirement
The requirement that you receive credit counseling prior to your bankruptcy is meant to protect the courts from frivolous filings as well as educate potential filers about their alternatives. The following are a few of the stated purposes of counseling:
- Educate you on whether bankruptcy is necessary
- Prepare a budget based on you income and expenses and demonstrate options for repaying debt
- Provide preliminary evidence to the court that your bankruptcy is reasonable
In the majority of cases, these budgets will only confirm what you already knew: that your income is too low and your debts too high for you to be able to repay them. However, even when such circumstances are obvious, you must still go through with counseling.
No debt situation is completely unmanageable, and with the right legal representation you can effectively utilize the tools offered by the bankruptcy system to regain your financial stability. For a free consultation to discuss the details of your case with our experienced Houston bankruptcy lawyers, call the Russell Van Beustring P.C., today at 713-973-6650.