Fulfilling Your Educational Requirements For Bankruptcy
In 2005, President Bush signed into law the Bankruptcy Abuse Prevention and Consumer Protection Act. Part of this act was the introduction of classes for consumers in an attempt to educate them about financial matters. These classes are required when filing bankruptcy. If you are planning to file for chapter 7 bankruptcy, read on for what you need to know about these two personal finance and credit counseling classes.
The Credit Counseling Class
This class must be taken prior to filing for bankruptcy. The main point of the class is the preparation of a budget, which should demonstrate your current financial situation and therefore justify the bankruptcy filing. In other words, your budget should clearly demonstrate that you are unable to meet your current financial obligations and that you have no other options but bankruptcy.
The agency that provides the classes will evaluate your budget and file a report with your bankruptcy petition. On rare occasions, the agency my find that you ought to be able to bring your financial situation under control without filing for bankruptcy. You must be ready to explain any extenuating circumstances that could make your budget appear to be sufficient for your obligations. For example, you may be able to show that the late fees that accumulate on your credit cards will only get worse since you are already so far behind, and therefore these increased minimum payments should be taken into consideration for the budget.
This class should be completed and the certificate filed with your bankruptcy petition. It may be taken online or in person. The cost depends upon your income, and could be free of charge if your income is very low.
The Personal Finance Class
The second class covers consumer information that will hopefully help you to avoid further financial difficulties. You will be presented with information on good budget preparation, how to use credit wisely and the importance of having savings accounts for emergencies. This class should be completed after you have filed for bankruptcy and after the creditor's meeting. Overseen by the U.S. Justice Department, you can find approved classes here. This two-hour class also bases the cost on your income with a sliding scale.
These classes have very strict completion deadlines and are a requirement for filing for bankruptcy, so pay close attention to the dates and information your bankruptcy attorney such as D Derk Demaree Attorney at Law provides to you. While it may seem like an added chore at a stressful time, the information and recommendations should be useful and may help ensure that you won't find yourself in such a dire financial situation again in the future.