The Credit Counseling Requirement in a Mississippi Bankruptcy
Deciding to file for bankruptcy is a big decision, but one that can bring about a great deal of positive change, wiping the financial slate clean for a brighter future ahead. Typically, those who decide to file for bankruptcy have explored their choices fully, and have no other viable options for paying off their consumer debts. Nevertheless, the federal government imposes a requirement that those who wish to file for bankruptcy complete a credit counseling session before they’ll be allowed to file. Learn more about what this requirement entails and how to fulfill it, below.
The US Trustee, the federal office overseeing the bankruptcy process, wanted to ensure that petitioners attempted to find other solutions before filing for bankruptcy. Thus originated the requirement for credit counseling. The pre-filing credit counseling requirement is straightforward and need not be intimidating. Debtors must choose a credit counseling agency approved of by the US Bankruptcy Trustee in order to receive credit for the session. Debtors can complete the session in person, online, or over the phone. The debtor provides information on their assets and income to the counseling agency, and the agency will, if possible, design a payment plan that would enable the debtor to pay off their debts without filing for bankruptcy. However, this is rarely possible, as most individuals do not consider bankruptcy unless they are truly out of alternatives. The session should last somewhere between 60 to 90 minutes. At the conclusion of the session, debtors receive a certificate of completion that must be filed with the court, along with the bankruptcy petition.
Perhaps the most important thing about the pre-filing counseling requirement is your timing in completing the session. While the counseling session is not itself time-consuming, it does require you to gather and submit materials showing your debt and income levels to the approved counseling agency. This prevents filers from submitting their bankruptcy petition at the last minute before, for example, a court judgment against you is entered based on one of your debts, or a foreclosure is made final. On the other hand, the certificate you receive at the completion of your counseling session will only remain valid for six months. If your attorney advises you to delay your bankruptcy filing for a legal reason, your certificate may expire if you completed the counseling too early in the process. Speak with your lawyer about when is best to complete your pre-filing credit counseling.
If you are facing an overwhelming amount of consumer or medical debt in Gulfport or Biloxi, Mississippi, seek experienced and knowledgeable legal help to escape the debt cycle by contacting the bankruptcy attorneys at the Gardner Law Firm for a consultation, at 228-436-6555.