When Tennessee residents have overwhelming debt, they are often looking for ways to get a fresh financial start. While many options may be available to a person, filing a Chapter 7 bankruptcy is often a good way to obtain debt relief. People may be aware that there are many necessary requirements to fulfil before they can file for bankruptcy. However, people may not know exactly what these requirements are. In particular, people may wonder — what are the credit counseling requirements to file for bankruptcy?

When changes were made to the bankruptcy code some years ago, the government added the requirement for credit counseling. This counseling was intended to make sure people understood all their debt relief options and to reduce the chances that the particular debt would return to bankruptcy court in the future. These goals were met in two different types of counseling — pre-filing credit counselling and post-filing debtor education courses.

In order to complete the credit counseling requirement, those considering filing for bankruptcy must meet with an approved counseling agency. This meeting can be done in person, on the phone or online but must be completed before filing. In this roughly hour long meeting, the approved credit counselor will help explain all bankruptcy alternatives that might be available. This meeting will also include a review of a person’s finances. A personal budget should also be created during the meeting.

These required sessions usually cost around $50 for debtors. However, the fees can be waived in some situations. Upon completion of the course, a person should receive a certificate which the person will need in order to file for bankruptcy.

Credit counseling is just one requirement necessary to file for Chapter 7 bankruptcy. An attorney can help explain all of the requirements and give specific advice — which this post cannot provide — about what type of bankruptcy is right for a person.

Source: Findlaw.com, “Bankruptcy: Counseling Before Filing,” accessed on Dec. 28, 2014