When an individual files for personal bankruptcy in the state of Florida, they will be required by the court to enroll in a credit counseling course. Credit counseling for bankruptcy is designed to educate the filing individual about the significant step they are about to take – as it will influence their financial situation for years into the future.
Even though bankruptcy will discharge qualifying debts, consequences do exist – and include:
- Bankruptcy remains on an individual’s credit report for up to a decade after the process is completed.
- Bankruptcy makes it difficult for an individual to obtain any additional credit in the future.
- Bankruptcy may negatively impact an employer’s decision to hire you in the future; due to a policy of checking credit reports before onboarding a new employee.
Before pursuing bankruptcy, you should seek professional credit counseling to determine if it is the best option for your situation. Despite the potential adverse consequences, sometimes filing for bankruptcy is the only alternative to relieve financial difficulties.
Being Prepared: Credit Counseling for Bankruptcy
Pre-bankruptcy credit counseling is required by Florida law. Even if you have yet to decide about filing, this counseling can significantly help determine if there are any plausible alternatives to the bankruptcy process. In other words, a consumer bankruptcy counseling course can allow you to make a more informed decision.
During the pre-bankruptcy credit counseling session, you will receive credit counseling advice and be educated about any alternatives to filing for bankruptcy. It can help you to evaluate other debt-relief options that are less harmful to your credit rating. However, credit counselors do not provide legal advice.
When preparing for a pre-bankruptcy counseling session, applicants should collect the information listed below. This information will help the advisor to fully and accurately understand their financial situation and make the best recommendation.
- Monthly household income and expenses
- Information regarding other assets, such as retirement plans, real estate, savings accounts, and vehicles
- Information regarding secured debts, such as mortgages and vehicle loans
- Information regarding unsecured debts, such as credit cards and personal loans
- Applicants will be required to provide the names of their creditors and the total amount of the current debt; however, the submission of account numbers is not required.
When bankruptcy credit counseling is completed, the filing party will receive a certificate to file with the court should they choose to proceed with bankruptcy. Remember, the credit counseling class may reveal that other consumer debt solutions are more beneficial, given the specific situation.
These alternatives may include the following:
- Debt management programs that consolidate debt without new loans
- Reverse mortgage counseling
- Foreclosure counseling
- Financial education for military families, veterans, those with student loans, and seniors.
If the decision after counseling is to proceed with bankruptcy, the individual will be required by the court to complete additional credit counseling. This debtor education course will be at least 2 hours long and will take place after the bankruptcy filing but before debts are discharged.
At the bankruptcy law offices of Richard V. Ellis, we understand that proceeding with bankruptcy is a big decision. While credit counseling provides the financial education and resources you may need, our team of bankruptcy attorneys will provide necessary and critical legal advice.
No one should have to face overwhelming financial issues alone – call today for a consultation and to learn more about your options. For decades, Richard V. Ellis has provided Sarasota area residents with the professional bankruptcy representation they need when facing a financial crisis.