In most cases, a person who wants to file for bankruptcy must complete credit counseling by a government-approved agency first. This is normally done within 180 days before documents are filed with the court. However, a Bankruptcy Lawyer in Tacoma WA can also help consumers who have to file in more of a rush. A common situation is when someone is facing imminent loss of the home due to foreclosure proceedings. Filing for bankruptcy halts the process.
Credit Counseling
The counseling includes a discussion on alternatives to bankruptcy, although this may not be delved into extensively when the participant has already filed. The requirement is not waived even if somebody has filed before receiving this type of counseling. Chapter 13, as arranged through an attorney such as Kevin G. Byrd, sets up a repayment program over three to five years. Trustees evaluate the person’s financial situation and determine whether making all the payments will be feasible.
Debt Education
A second requirement, for people who file for Chapter 7, is to complete a course in consumer debt. This is required before the person’s debts can be discharged. Both credit counseling and the consumer debt course do not have to be completed in person. This can be done by phone or online.
Reasons for the Requirements
These regulations are in place in an effort to make sure the person does not ever wind up in a similar situation in the future. Credit counseling helps men and women learn to manage credit more responsibly, including taking on more debt than they can easily pay back. The other course teaches participants how to budget effectively so that they do not fall behind on their obligations. It also addresses the smart use of credit. There is some overlap between the two, but they each offer distinct advantages to individuals who have gotten into serious financial trouble.
After the client completes these requirements, a certificate for each one is sent to the person’s Bankruptcy Lawyer in Tacoma WA. The attorney then files the documents with the court. Bankruptcy is intended to provide a fresh start. Credit counseling and debt education are intended to provide a solid foundation for that new beginning.
