The Importance of Credit Counseling during a Gilbert Bankruptcy Filing

The Importance of Credit Counseling during a Gilbert Bankruptcy Filing

You may know that filing for bankruptcy can give you enormous debt relief and help you get you back on the right financial path. What you may not know is that filing for bankruptcy involves a lot more than filling out some forms, submitting them, and getting your discharge. There are many more steps and requirements before you can get your debts discharged.

One of the requirements of filing for Gilbert bankruptcy that often comes as a surprise is to enroll in credit counseling. But rather than seeing this as an obligation that you have to fulfill on the way to being debt free if you file for Gilbert Chapter 7 bankruptcy (or at least having your debts under better control if you file for Gilbert Chapter 13 bankruptcy), you should see the credit counseling as an important benefit. Here are a few reasons why this counseling is so important:


Pre-Filing Credit Counseling

Before you can even submit your bankruptcy paperwork, you must complete credit counseling. This is known as “pre-filing credit counseling.”

The purpose of pre-filing credit counseling is to help you understand the pros and cons of bankruptcy. Some of the advantages of bankruptcy, you will learn, are that it can eliminate all of your unsecured debt or put you on a more affordable plan to pay back your debt. Bankruptcy can help you to avoid foreclosure on your home, and it can help you rebound financially much faster than trying to pay off your debts on your own.

Of course, one of the big down sides of filing for bankruptcy is that your credit score will take a hit. But if you didn’t file for bankruptcy, chances are good that your score was already down because of your maxed out credit cards, late payments, and delinquent accounts. In those cases, filing for bankruptcy can actually help your score because it absorbs those accounts and gives you a fresh start.

The pre-filing credit counseling also provides information about options for debt relief. While you likely won’t want to take advantage of those options if you are so overwhelmed by debt that you are pursuing bankruptcy, you likely won’t gain much from these debt relief alternatives. However, if you find yourself struggling with finances again in the future, you can use the information you learned about debt relief alternatives to maybe solve your issues before you need to file for bankruptcy again.

Pre-Discharge Counseling

As your bankruptcy case starts winding to a close, you will be required to take a second credit counseling course just before the filing is discharged. In this counseling course, you will learn overall financial literacy, as well as how to manage your finances. The goal is to show you what you can do to avoid getting into problems with debt in the future.

Of course, many people are led to bankruptcy not because of bad spending habits, but because of unfortunate life circumstances. Some face an unexpected illness or job loss, and others are blindsided by a divorce. However, these credit counseling classes help everyone learn to be smarter about their finances, which can help us all, no matter what stage of life we are in.

The required credit counseling courses for a bankruptcy filing in Gilbert are not meant to be a punishment – they are meant to help you. No matter what led you to filing for bankruptcy, the information that you get from those credit counseling courses will help you take greater control of your finances now and in the future. You’ll be more certain if bankruptcy is right for you, and you’ll have tools in your arsenal if you find yourself in financial trouble again.

Gilbert Bankruptcy Lawyers can help you learn more about the bankruptcy process and whether it may be right for you. Our bankruptcy attorneys will review your finances with you and help you understand the options, including Chapter 7 bankruptcy and Chapter 13 bankruptcy. We’ll help you choose the option that will give you the most debt relief available to you. Contact our bankruptcy law office in Gilbert today to talk to an experienced and compassionate bankruptcy lawyer about your options. This may be the year that you turn your finances around!
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Gilbert Bankruptcy Lawyers
Office: 480-448-9800