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Bankruptcy filing has taken on a new phase, as Chapter 7 and Chapter 13 petitioners must now take two new classes during the process. Before filing, individuals are required to attend a credit counseling course. In addition, they must attend a personal financial management class before getting a discharge at the end of the course. Consulting with a bankruptcy lawyer in Raleigh will give one a better idea regarding these requirements.
Pre-Bankruptcy Credit Counseling
Taking a credit counseling course helps individuals understand if they need to file for bankruptcy and if an informal repayment plan is a viable option. This is a requirement, even if the petitioner cannot come up with a repayment plan because of high debts and low income.
Approved counseling agencies are listed on the US Trustee’s website. The agency will do the following:
- Prepare a budget based on the debtor’s income
- Review the petitioner’s background and capability to pay the debt
If the agency can come up with a repayment plan, it must be filed together with the other bankruptcy documents. If the court decides that the repayment plan can be completed, the court may encourage the individual to file for Chapter 13 bankruptcy in Raleigh. Petitioners must then explain their side and detail why they do not have to repay their debts.
Upon the completion of the course, a certificate will be issued. This should be brought when presenting the paperwork for bankruptcy.
Pre-Discharge Debtor Education
After filing, the individual must attend a financial management course. This is a requirement before getting a discharge. Included in this course are strategies that are designed to help petitioners remain financially sound after filing.
The pre-discharge course is provided by an agency that has been approved by the Office of the US Trustee. Approved agencies are likewise listed on the US Trustee’s official website. They allow flexibility in payment if the person can pay the full price. How the course is provided may vary depending on the agency.
Upon the completion of the course, the petitioner must file two documents:
- Form 423, which certifies participation in the course
- A certificate of completion from the debtor education agency
The date of filing depends on the type of bankruptcy in Raleigh. In Chapter 7, filing should be done no later than 45 days after the date on which the debtor’s meeting with the creditors was first set. In Chapter 13, the filing should take place on or before the date of the last payment.
Stay on Top of Bankruptcy Education
Taking credit counseling and debtor education classes are not just mandatory bankruptcy tasks. These courses provide individuals with perspective regarding their past difficulties and financial guidance on how to deal with their situation moving forward.
Talk to a reliable bankruptcy lawyer in Raleigh to give you expert advice on debt repayment, debt discharge, and other related matters. Call Weik Law Office today at 919-845-7877 for a free consultation, and set up a time to speak with one of our friendly professionals.