KY Bankruptcy Attorneys: Credit Counseling
Bankruptcy is a federal process that gives well-intentioned, but financially overwhelmed, people the opportunity to discharge their obligation to pay certain debts and to begin rebuilding their credit.
A complicated legal maze, bankruptcy’s protections and drawbacks are frequently misunderstood. It is important when considering bankruptcy to consult an experienced Lexington bankruptcy lawyer with the knowledge and skill to guide you through the process.
If bankruptcy seems like the best debt relief option for your situation, the law requires that you complete credit counseling before filing a bankruptcy petition. Counseling must occur within 180 days prior to filing a Chapter 7, Chapter 11, Chapter 12, or Chapter 13 Bankruptcy. When you successfully complete the counseling with an approved credit-counseling agency, you will get a numbered certificate to accompany your petition. While this process is critical for individuals and businesses, municipalities considering bankruptcy under Chapter 9 should also seek the guidance of a Chapter 9 bankruptcy lawyer to understand the specific requirements applicable to them. The pre-bankruptcy credit counseling focuses on how to eliminate what you owe and should not be confused with the post-bankruptcy financial management course that provides information on developing a budget, managing money, and using credit wisely. Together, these mandatory courses are known as the debtor education component of bankruptcy, though they have different goals and cannot be taken at the same time.
With over 35 years experience in our community, the Fayette County bankruptcy lawyers at Bunch & Brock are committed to providing each of our clients with a high level of personal service. We are dedicated to helping those in our community make the best plan for eliminating or repaying their debts. We understand each step necessary for filing a successful bankruptcy petition and know how to evaluate whether filing bankruptcy is the right path for you. If you are burdened with debt, you need the calm competence of a skilled legal team in your corner. We encourage you to contact our office by calling 859-254-5522 or filling out this online form.
The pre-bankruptcy filing counseling session became mandatory in 2005 due to Congressional concerns that too many people who were financially capable of repaying their debts were instead turning to bankruptcy to have those debts discharged. The counseling is also an effort to make sure that debtors are fully informed of potential advantages, disadvantages, and alternatives before making such a financial decision as serious as filing for bankruptcy protection. The credit counseling course may be completed in person, online, or over the phone, and takes approximately 60 to 90 minutes. The agency providing the session must be approved by the Executive Office for U.S. Trustees (EOUST) and only those counselors that appear on the EOUST’s list can advertise that they are approved to provide the required counseling. A full list of approved agencies by state can be found on the U.S. Trustee Program section of the Department of Justice’s website. While the majority of those listed for Kentucky are physically located in other states, they are approved to provide internet and telephone credit counseling here.
Credit counseling is required for everyone who seeks bankruptcy protection. The agency prepares a budget based on the income and expense information you provide, reviews your repayment options, and typically confirms that bankruptcy is the only option for handling your debt. However, if the agency proposes a feasible repayment plan, you do not have to agree to it, but you do have to include it in your bankruptcy filings. Credit counseling is not automatically free. Rather, the agencies have to offer a sliding fee scale (usually capped around $50) and a complete waiver for people below 150 percent of the poverty level for a family of equal size. Fee-waiver policies vary by agency, although all agencies are required to inform clients before beginning a counseling session that services are available for free or at a reduced rate based on a client’s ability to pay.
Anyone can find themselves facing tough economic choices, crushing debt and the need to rebuild their financial foundations. Each situation has a unique set of facts; and the best course of action varies, depending on where you live, how much property you have, how much debt you have, and what type of bankruptcy you wish to file. The sooner you speak with a lawyer; the sooner you can get a fresh start. For more detailed, specific information, consult the Lexington, KY, bankruptcy lawyers at Bunch & Brock by calling 859-254-5522 or filling out this online form. You can rely on us for accurate, honest case analyses and dedicated representation. We have helped countless individuals get the relief they deserve, given their personal set of circumstances, and we can help you.