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Credit Counseling and Bankruptcy

Filing for bankruptcy can mean a fresh start and a way out from underneath crushing bills due to a medical emergency, a divorce, or a life event that was unforeseen. It can also mean a time to learn about credit and how to use it wisely. Credit counseling, therefore, is an integral part of both Chapter 7 or Chapter 13 bankruptcy. Before a bankruptcy is discharged, a petitioner must consult with a nonprofit credit-counseling agency to see whether s/he can feasibly handle the debt load outside of bankruptcy. Let’s take a closer look at this process and how it can help your future financial situation.

Prior to the discharging of a bankruptcy, there are several requirements that must be met. These include: disclosing all aspect of finances in the bankruptcy forms, paying a filing fee (or the equivalent waiver form) and seeking credit counseling no later than 15 days after your filing date.

The reason behind the credit counseling course is to give the petitioner a better idea of whether the bankruptcy is really needed or whether an informal repayment plan would resolve the financial situation. This credit counseling is required even if credit card debt is not the reason behind the bankruptcy.

Finding a credit counselor should be fairly simple in that there are lists online of approved credit counselors for your bankruptcy. You can find out which agencies have been approved for your judicial district by visiting the Office of the U.S. Trustee’s website at; click “Credit Counseling & Debtor Education” to see the list.

The cost of this counseling is on the petitioner, but there is a sliding scale dependent on the income level of the individual or family. The Office of the U.S. Trustee, the law enforcement agency that oversees credit counseling agencies, has indicated that a “reasonable” fee might range from free to $50, depending on the circumstances.

If you have questions about your bankruptcy or credit counseling requirement call the Law Office of Barry R. Levine today by phone at 978-922-8440, or visit our website at