Credit counseling questions

Due to the complexity of filing for bankruptcy, many applicants seek reputable legal assistance. For the typical consumer, the notion of seeking debt relief in court is daunting, and rightly so. A large number of consumers do not know that professional credit counseling is now required for everyone who files for debt relief in court. You can still file without a lawyer, but you may not file without undergoing credit counseling first. Bankruptcy is complicated business; that's why a lot of attorneys specialize only in debt relief law.

Under current law, anyone who completes pre-bankrputcy credit counseling must also be prepared to verify it in court. Many consumers do not know about the counseling requirements in the new law, and only discover it when they get to court. The bankruptcy filing changes put into law by Congress in late 2005 are now established in law, and one of the requirements is that Americans filing for bankruptcy must first submit to credit counseling.

Below are some frequently asked questions regarding credit credit guidance and filing for bankruptcy:
 

Must I make an appointment with with the counselor in person?

You may meet with a financial professional in person if you desire to or if it is easy for you to do so. A few counseling organizations conduct group sessions using conference calls. You may talk in person or you may receive counseling over the telephone or using the World Wide Web.

Is professional counseling costly?

Congress has set a suggested price for the counseling session of $50, which may be waived if you cannot afford to pay it. Counseling companies are mostly providing these sessions as a service; offering professional guidance for $50 is not exactly lucrative.

Won't the agency simply try to talk me out of filing for bankruptcy?

A number of dishonest companies have been caught trying to direct all of their clients into expensive debt repayment programs. In the past, a large number of organizations have tried to steer debtors into enrolling in a costly debt management service instead of a bankruptcy filing. Debt management programs can be quite profitable for the consulting company, as they receive a share of the fully repaid debt. Ever since the new bankruptcy law has gone into effect, 97% of consumers have wound up filing for debt relief, which suggests that many people are too deep in debt to pay their way out, even with help from professional counselors.

Can I visit any credit counseling agency?

Seeking counseling by an organization that has not been approved by the Trustees will mean that your filing for debt relief in court will be refused. You must meet with a counseling agency that is approved by the U.S. Trustee's office. The U.S. Trustees have standards that must be met by any and all counseling companies, and not all of them will meet the requirements. You may find a list of qualified organizations at the U.S. Trustees' Website; authorized agencies will give you a certificate upon completion of the counseling session.

Financial professionals are there to aide you, guide you, and help you in the direction of a better financial future. The new debt relief is not totally fair but the government-madated assistance clause was at least supposed to help those with debt problems. The purpose of professional help is to point out all of the options that are available to you so that you might make a knowledgeable decision about what is best for you personally. You may, if you wish, opt to repay rather than filing for bankruptcy.