The constant problem of how to pay the bills and get out of debt can make life harder than it already is. Many people turn to bankruptcy at some point to find some relief.
When people file for bankruptcy, the court requires the completion of two credit counseling courses. Here is an explanation of why courts require this and what people learn from these taking these two courses.
The Purpose of Credit Counseling
When you meet with a bankruptcy lawyer to discuss filing, they will tell you that you must take two credit counseling courses. Your lawyer will also explain the purpose of these courses.
Credit counseling services have several purposes for people struggling with major financial problems. The first purpose is to help a person determine if they really need bankruptcy. The first course you take will teach you about the alternative options to bankruptcy, just to give you one last chance to choose another way out.
Another purpose is to help you learn how to better manage your money. If you file bankruptcy, you must wait a certain number of years before you could file again. This time requirement is there to prevent people from filing all the time, and credit counseling helps people avoid getting into financial problems in the future.
The Rules Related to the Timing of the Courses
If you decide to file for bankruptcy, you must fully understand the rules related to the timing of these courses. The first rule relates to the timing in which you must take the first course. The law requires you to take it 180 days or fewer before you file.
This requirement is there to make sure the information is fresh in your mind when you file. You must take the second course sometime after filing but before the court discharges your debts. Failing to take either course will prevent your case from proceeding.
Things You Will Learn Through These Courses
The two required courses will teach you a lot of different things, but here are some of the main things you will learn through credit counseling courses:
- Alternatives to bankruptcy. Bankruptcy has consequences, which is why you should make sure this is the wisest option for the debt problems you have. Through the course, you might discover there is a better choice for you and the situation you are in.
- How to develop a budget. Learning to create and stick to a budget is a great way to develop better money-management skills. With a budget, you control your spending and savings, and living with a budget offers a way to stay debt-free.
- Ways to reduce expenses. You will also learn methods for reducing monthly expenses. An example of this is calling around for insurance quotes. By doing this, you could save money each month on your insurance premiums.
- Effects of bankruptcy on your credit. Many credit counseling courses also include information about the negative effects of bankruptcy on your credit, as well as information about the amount of time the bankruptcy will stay on your credit report.
Credit counseling courses emphasize positive spending habits. These courses should help you learn better tools and methods for controlling your money. That way, you can work toward rebuilding your financial health after filing bankruptcy.
If you need help with your finances, and you are not sure which way to turn, then contact us at Olson, Kulkoski, Galloway & Vesely, S.C. We offer bankruptcy services and assistance with other types of debt-relief methods. Schedule an appointment with us today so we can help you find the right option for your personal situation.