The Bankruptcy Code mandates that the debtor take a credit counseling course within 180 days prior to filing bankruptcy. The course is one of the many useless hoops debtors must jump through prior to filing their bankruptcy petition.
If you really want to avoid bankruptcy, this “course” is not helpful
I, like any other bankruptcy lawyer I know, view bankruptcy as a last resort. I give my clients other options prior to suggesting bankruptcy–provided those options make sense for the client. We discuss debt management plans (which occasionally work), doing nothing (generally not a good idea but an option), or debt settlement (many times a good bankruptcy alternative if the client has some financial resources).
I also suggest the client speak with a reputable agency here in Charleston, South Carolina area, Family Services of Charleston. Family Services is a non-profit with an excellent reputation for helping consumer in Charleston. Most other communities have similar non-profit agencies. If you want unbiased information on bankruptcy alternatives, getting input from a local agency is a good idea. If you can address your financial problems without bankruptcy, they’ll set up a plan to help you. And if your situation is severe enough to warrant bankruptcy, they’ll tell you that as well.
The mandated credit counseling course is very different
The course you must take to file bankruptcy is very different. It’s usually a one-size-fits-all course telling you that you might be able to avoid bankruptcy by cutting back on your expenses, or by getting a debt consolidation loan, or by refinancing your house.
I know, you’ve thought of those options already, and they won’t work. And therein lies the problem with the requirement. It’s sort of like a non-smoking class for folks with lung cancer. At the point you take the couse, you already know you’ve got financial cancer. You probably know what caused it as well. Most of my clients predictably view the course as patronizing and useless, and I agree with their analysis. Most bankruptcies are caused by job loss, divorce, or medical problems. Clients feel horrible about their situation. They don’t need their noses rubbed in the mess they’ve made.
Do it late and do it quickly
There’s really nothing to be gained from the “course,” except that you need the certificate to file bankruptcy. It’s your ticket in to the bankruptcy system. Enter the information quickly, and get it over with. However, don’t take the course until shortly before you are scheduled to file bankruptcy. It’s only good for 180 days, and you don’t want to have to waste you time on this useless exercise again.