Lexington Debt Education Attorney

Lexington Debtor Education Attorney

Bankruptcy protection can help you gain control over your life and finances — but filing for this benefit does require you to jump through a few hoops. To apply for personal bankruptcy, you are required to undergo pre-bankruptcy credit counseling as well as a post-filing debtor education course. (As of 2005, these conditions are mandated by the Bankruptcy Abuse Prevention and Consumer Protection Act.) The BAPCPA requires that you (1) get credit counseling from a government-approved organization within 180 days before filing and (2) complete a financial education course after you have filed.

These rules apply to people filing Chapter 7 (liquidation), Chapter 13 (individual reorganization with unsecured debt below $383,175 and secured debt below $1,149,525), Chapter 12 (similar to Chapter 13 for distressed family farmers and fisherman), or Chapter 11 (individual reorganization without any unsecured debt limitation).

With over 35 years of experience in Fayette County, the 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 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 859-353-6883 or filling out our online form.

About Pre-bankruptcy Credit Counseling

Credit counseling must be complete before you file for bankruptcy and cannot be undertaken at the same time as your debtor education. The session with an approved counselor lasts about 60 to 90 minutes and can take place in person, on the phone, or online. (If not done in person, there is a verification process to make sure you are, in fact, the debtor.) By law, credit counseling must include at least:

  • An evaluation of your personal financial situation – current debts, creditors, income, etc.
  • A discussion of alternatives to bankruptcy – you may be eligible for other avenues, such as a consolidation loan. However, the choice is yours. The counselor is not allowed to advise whether or when to file bankruptcy.
  • A personal budget plan – money management skills, debt avoidance, etc.

Once you finish your counseling, you can expect to receive a numbered certificate of completion. If you are filing for joint bankruptcy as a couple, you may attend the same counseling session, but you each must receive personalized counseling and separate certificates. The certificate is important – it is your proof of course attendance and must be included with your bankruptcy petition.

Certificates are distributed only by nonprofit credit counseling organizations that have been approved by the Department of Justice’s U.S. Trustee Program. To find an appropriate organization, you can check this list of approved credit counseling agencies online or choose a provider at the bankruptcy clerk’s office for the district where you will file. Kentucky has an Eastern District and a Western District. The Eastern District, in which Fayette County is located, currently has approximately 60 providers listed, several of which offer services in Spanish as well as English.

The mandatory credit counseling comes with a fee of around $50, but approved agencies must offer sessions for free to those who cannot afford it. Fee-waiver policies vary by agency. At a minimum, however, a client whose household income is less than 150 percent of the poverty level is presumptively entitled to a fee waiver or fee reduction.

Post-Filing Debtor Education

After you file a proper bankruptcy petition, relief cannot be granted until you successfully complete a personal financial management instructional course. As with the pre-filing credit counseling, there are approved debtor education agencies (about 70 in the Eastern District of Kentucky) that issue completion certificates. Joint filers can take the course together, and the session can take place in person, on the phone, or online. The debtor education course usually takes two hours and costs $25. (Waivers can be requested.)

Your debtor education will typically include information on budgeting, managing your money, and using credit wisely, among other topics. Below is a brief overview of what you can expect to cover in your course:

  • Budgeting – Budgeting is a necessary skill that can help you prevent future financial problems. With budgeting education, you’ll learn how to create a written budget and stick to it. Tracking and analyzing your monthly expenses can uncover the source of some of your trouble — for example, many people learn that they tend to overspend on gifts or trips to the local coffee store. Following your budget every month can help you eliminate unnecessary expenditures and avoid spontaneous purchases.
  • Managing money – The key to successful money management is spending less than you earn. Your education course will provide tips to help you make better decisions and create a strategy that can lead you to increased prosperity. You’ll learn how to set achievable goals for saving instead of spending and how to avoid common money mistakes. Tips for using technology to help manage your money will also be offered.
  • Using credit wisely – Credit cards can be an expensive trap, one that has ensnared many naïve consumers. Your financial education will explain the benefits of using cash instead of credit and provide information to help you avoid paying high interest rates. You’ll also learn about credit offers that are worth pursuing and ways to monitor your credit score free of charge.

How We Can Help

Anyone can find himself struggling with debt and the need to make difficult economic decisions. 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, your level of debt, and what type of bankruptcy you wish to file.

The sooner you speak with a lawyer, the sooner you can determine your options and get a fresh start. For more detailed, specific information, consult the Lexington, KY, bankruptcy lawyers at Bunch & Brock by calling 859-353-6883 or filling out our online form. You can rely on us for accurate, honest case analysis and dedicated representation. We have helped countless individuals get the relief they deserve given their personal set of circumstances, and we can help you.