Before Filing Your
Case
If you've looked into filing bankruptcy, you may be aware
that before you can file the case you must first take a
mandatory credit counseling class and provide the
certificate of completion to your lawyer. What is
this class? It's not really a class so much as it is a
data entry session where you go to a website and type in
information about who you are, how much (or little!) money you
earn, what your monthly living expenses are, and what debts
you need to put into bankruptcy. After you've entered
all this information, you typically have to call in and talk
to a live "counselor" for a few minutes to verify the
inforamtion you typed in. After that, the provider of
the class will email out to you a certificate of
completion. Your lawyer cannot file your case without
that certificate.
I personally feel this is a waste of time and money,
but it is required before you can file bankruptcy.
Congress implemented this new requirement during the 2005
changes to bankruptcy law as a means of trying to "screen out"
people who may not really need to file. As it turns out,
less than 5% of the people who take this "class" ever choose
not to file. In other words, 95% of people who take the
online session end up filing bankruptcy anyway, so it's not
much of screening process. The truth is that very few
people take bankruptcy as an "easy out." Most people who
file bankruptcy are in terrible financial straits and need
help fast!
Where do you go to take the class? I recommend
http://www.personalfinancialeducation.com/ to
my clients because it's the cheapest one I've found.
They charge $30 whether you are a single person or married
couple filing jointly. Most other places charge anywhere
from $50 to $75.
After Filing Your Case
After your case is filed you must take another, seperate
online education session called a Financial Management
Class. This session is longer, more comprehensive, and
potentially more rewarding. You watch some online videos
and take a few very simple tests (mainly to prove you are
watching). Some of my clients have found this class
helpful because it teaches budgeting and other rudimentary
financial survival techniques. It usually takes at least
two hours so set aside some time and pop some corn! You
must take this class and provide a certificate of completion
to your lawyer to file with the court or your case will close
without a discharge--a horrible result!
Where do you go to take the class? I recommend
http://www.50-30-20.com/ to my clients
because, again, it's the cheapest I can find at $14.95 per
person. After you take the class, be sure to provide
your certificate of completion to your lawyer so it can be
timely filed.