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Digital News Report – When you think of bankruptcy you usually don’t think of the Federal Reserve, but they are now providing information to help consumers deal with bankruptcy protection.
The Fed, in conjunction with the Department of Justice’s U.S. Trustee Program, has prepared a website to help Americans deal with Credit Counseling and Debtor Education. It is the Dept of Justice which approves organizations to provide the mandatory credit counseling and debtor education, so they may be the best authority on the subject.
The DOJ says that in Alabama and North Carolina special court officials, called Bankruptcy Administrators, help consumers deal with the financial problems before declaring bankruptcy.
<h3>Credit Counseling</h3>
In some instances people may have to undergo debt counseling before they sign-up for a pre-bankruptcy counseling session. Debt councilors will discuss “alternatives to bankruptcy, and a personal budget plan”.
You must file a “certificate of credit counseling completion” when you file for bankruptcy, according to the Fed. “Only credit counseling organizations and debtor education course providers that have been approved by the U.S. Trustee Program may issue these certificates.”
<h3>Pre-bankruptcy Counseling</h3>
You will need to go through a “pre-bankruptcy counseling” session which should last between 60 and 90 minutes. This can take place in person or on the phone or even online and it may be free of charge if you cannot afford to pay. Ask for a fee waiver before you begin, but the cost is usually about $50 depending on your location.
You will be given a certificate upon completion of this counseling. “Check the U.S. Trustee’s website to be sure that you receive the certificate from a counseling organization that is approved in the judicial district where you are filing bankruptcy” the FTC said in their statement. The certificate is free.
<h3>Post-Filing Debtor Education</h3>
This course will help debtors develop a budget, manage money and understand how to use “credit wisely”. These courses can be offered on the phone, in person or on the Internet. Expect this course to last at least two hours and cost between $50 and $100. Again, if you are unable to pay ask for a fee waiver.
The certificate your receive from this course is fee. Here is the link to the USDOJ Trustee Program Website.
By: Tina Brown
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