Why do I have to take an education course for my bankruptcy?
The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 includes two provisions mandating financial counseling and education. Before filing for bankruptcy, consumers are required to have a briefing on the alternatives to bankruptcy; and before receiving a bankruptcy discharge a debtor is required to complete “an instructional course concerning personal financial management.” These provisions were included to provide debtors in bankruptcy with the skills and tools needed to avoid future financial problems.
What's the difference between a Chapter 7 and Chapter 13 bankruptcy?
Chapter 7 bankruptcy is for debtors who don't have the ability to pay their existing debts. A trustee takes possession of all non-exempt property, which they then sell to pay your creditors according to priorities of the Bankruptcy Code. The purpose of filing Chapter 7 is to obtain discharge of your existing debts, however some debts are not dischargeable under the law.
A Chapter 13 bankruptcy is for individuals with regular income who are unable to pay their debts under their current terms. You file a plan with the court to repay your creditors all or part of the money you owe them, using your future earnings. The court must approve your repayment plan before it can take effect. Under Chapter 13, unlike Chapter 7, you may keep your property, both exempt and non-exempt, as long as you continue to make payments under the plan. After completion of payments under your plan, your included debts are discharged.
How much does bankruptcy counseling and education cost?
Each bankruptcy counseling and education session costs $50 to complete. The cost is the same if you are filing jointly or as an individual. MMI is able to waive fees for consumers whose household income is equal to or less than 150 percent of the estimated poverty threshold for their applicable family size as published in the current Federal Poverty Levels Guidelines.
Do I need an attorney to file for bankruptcy?
You are not required to use an attorney when filing for bankruptcy, however bankruptcy laws can be complicated. Working with a trusted attorney can help ensure a smooth process.
How long is a bankruptcy counseling/education session?
Pre-filing bankruptcy counseling typically takes between 45 minutes to an hour. Pre-discharge education courses usually require a minimum of two hours to complete.
How do I get a certificate to complete the bankruptcy process?
Completing the bankruptcy process requires two certificates - pre-filing certificate and a pre-discharge certificate. The pre-filing certificate is obtained by completing a pre-filing bankruptcy counseling session. The pre-discharge certification is obtained by completing a pre-discharge education course. Certificates are available immediately by email, or can be sent by mail or fax.
Does the bankruptcy counseling certificate expire?
Bankruptcy regulations require consumers to receive counseling within 180 days of filing. If you choose to file more than 180 days past the date of your initial bankruptcy counseling session, you will need to schedule another appointment to talk with a trained bankruptcy counselor.
Are services available in Spanish?
Services are available in English and Spanish. Additional languages are available via an interpreter service.
How long does it take to recover from bankruptcy?
A notation that you filed for bankruptcy will remain on your credit report for seven to ten years, depending on the chapter you file. The negative impact of this notation will lessen over time, but you may have trouble obtaining new credit with affordable repayment terms in the years following a bankruptcy. Fortunately, you don’t have to wait seven to ten years to reestablish a strong financial foundation and
start building better credit.
How do I get new credit after filing bankruptcy?
There are plenty of lenders out there that will finance someone with a past bankruptcy. You may want to begin building a good credit rating by starting small. A secured credit card is easy to obtain and can help you to establish yourself as credit worthy. Be sure to read and understand all of the terms and conditions of any new loan.
How do I remove a bankruptcy from my credit history?
To get the bankruptcy off your credit history, all you have to do is wait. A bankruptcy will stay on your credit report for up to ten years, after which it should come off the automatically. To verify that this has been done, you may want to pull a copy of your credit report. There's no legitimate way to remove a bankruptcy notation ahead of schedule, so be wary of any company that claims to be able to remove negative marks from your credit report.
