Credit counseling, prior to filing for bankruptcy, has become a pre-requisite as mandated by the Bankruptcy Law of 2005. Thus, before a consumer can declare bankruptcy, one is required to present a certificate proving that credit counseling has already been sought before making such decision.
These days, debt as a way of life has become a proven fact. And at most times, it becomes difficult for one to pay their debt out resulting in new debts, overlapping dues and financial mismanagement. And the most common solution that one resorts to is to file for bankruptcy.
As mandated by the Bankruptcy Law of 2005, the first and the most important step to filing for bankruptcy is to seek credit counseling. Credit counseling involves a third who provides the consumer a straightforward and an in depth assistance and advise on how to properly manage your debts. It is an honest yet a bit costly service provided by highly qualified credit counselors or most commonly referred to as debt counselors.
Credit counseling gives you a thorough and perhaps the best advice as that of banks and other financial institutions as to how you could well manage your existing debts and manage your finances.
In filing for bankruptcy, one must also file and complete a credit counseling certificate from an accredited and reliable credit counseling company. In finding a credit counselor to assist us in our financial dilemma, one should keep in mind the service background and the reputation of the company. There are some who offer financial advice yet are unable to provide us a certificate of completion.
At some point, pre-Bankruptcy programs are offered by the credit counseling company to give one the best possible advice there is in filing for bankruptcy and the complexities that come along with it. Such pre-Bankruptcy program will provide the consumer an overview as well as guidelines in filing and the must-knows about credit standing and how credit score affects one’s filing for bankruptcy.
Included in the credit counseling program is an assessment of one’s credit standing and financial standing, the provision of other methods to look into for one to resolve his/ her financial issues without having to file for bankruptcy, and the formulation of a well-organized financial plan to assist the consumer in the steps that he or she will undergo.
In exchange of the debit counseling services and the expert advice that we get, one is entitled to pay a professional fee. This fee usually runs around $50. However if one is financially unable, some debit counseling agencies will do this without asking for any fee. But this is not made available to many, as one is obliged to submit a proof of financial inability to avail of this free service. The program can be taken over the phone, through the internet or in person. Prior to taking the program, one should already be aware of the fees he or she is expected to pay.