The bankruptcy reform laws that were passed in 2005 made it mandatory for the people considering insolvency to attend a credit counseling session. However, it is quite difficult to understand whether you are contacting the right credit counseling agency or not. Connecting with the wrong agency can blow your chances of filing bankruptcy. Therefore, you should keep in mind the following points before you proceed:
As stated previously, bankruptcy without a credit counseling session is not possible. Therefore, you should get it done as soon as possible. Unnecessary delay will just make things tougher for you as well as your attorney. If the credit counseling formality is over as early as possible then the bankruptcy process will be relatively quicker and you would be debt free faster.
The credit counseling agency that you select must be government approved. In other words, if the credit counseling agency is not present on the U.S government’s list of approved agencies then your counseling will not be counted as valid at all. You might visit justice.gov and choose the state you live in to find the government approved agencies near you. These counseling agencies are usually dependable. Nonetheless, it is always wise to check the reviews about the agencies before selecting them.
Some credit counseling agencies offer “credit solutions” to people. This should generally be avoided at this time as they can be expensive as well as risky for debtors. These solutions generally include debt relief programs like debt consolidation as well as debt settlement. These debt relief programs have many beneficial features but they might not be suitable for all people under all circumstances. For a person with several debts and acute financial crisis, bankruptcy is generally the only way out. In this case other debt relief options will delay bankruptcy but eventually won’t be able to stop it. In between, the value of the debtor’s assets may go down.
Make sure to keep in mind the above points if you are contemplating a credit counseling prior to bankruptcy.