Many Americans are thinking about filing bankruptcy but since the laws changed in 2005, you had better be prepared. In most states, you are required to go through Pre-Bankruptcy Counseling before you file your bankruptcy and then evidence that you have completed your debtor education before your bankruptcy can be completed. This counseling must be given by approved educators and a bankruptcy attorney can tell you where to get the approved list.
This counseling session should include a review of your personal financial situation, discussion of other options as an alternative to bankruptcy, and finally either tools to help you setup a budget or setting up a personal budget. The session should last between 60 and 90 minutes and can take place in person, over the phone or even online. If you are not able to pay for the session, the organization is required to give the session free of charge for those who cannot pay. Generally, the fee for this session is about $50.00 but will depend on where you live, the type of service you will receive and other factors.
If you get this session from an approved organization, you will get a certificate as proof. Without that certificate you will not be able to file your bankruptcy because of the new law. These organizations are not allowed to charge an extra fee for the certificate.
Once you have filed your bankruptcy, you will need to complete a debtor education course by an approved provider. This course will help you learn how to develop a budget, then learning how to manage your money. Additionally, you will be given some tools on how to use your credit wisely along with other resources. Normally, this session is about two hours in length. The cost for the session is generally between $50 and $100. This fee can also be waived if you are unable to pay for this session. You will also need to get the approved certificate so that your bankruptcy can be completed and your debts either discharged or organized for repayment.
Talk with a professional about what options are available to you. This will protect you and get you started down the right path. You can also go to www.ftc.gov and review your rights.