Chapter 7 Bankruptcy Counseling

Chapter 7 bankruptcy proceedings are extended to individuals and corporations who pass the means test that reflect their inability to pay off the debts, calling for the liquidation of the assets. The law demands the individual to file a bankruptcy petition before the federal bankruptcy court, along with the defined documents. One major requirement that is required by the Code is the submission of the certificate stating the completion of the credit counseling program.

The Chapter 7 bankruptcy counseling sessions are to be undergone by the petitioner before filing the petition. Under Section 190 (h), the petition submitted by the debtor before the federal bankruptcy court seeking relief under Chapter 7 gets rejected in the absence of the counseling certificate. The debtor is demanded to attend the course within 180 days prior to filing of the petition. Depending on the party/parties involved, the debtor is to receive an individual or group briefing from the agencies approved by the United States trustee or bankruptcy administrator.

The Chapter 7 credit counseling course aims to educate the debtor on the personal finance management. The credit counseling has to be offered by the agencies approved by the U.S. Trustee Program, which is a branch of the United States Department of Justice. The Chapter 7 bankruptcy counseling is an experimental program, the effectiveness of which is to be evaluated.

One of the major intentions behind the credit counseling sessions are to assist the debtors in enhancing their debt management skills that can go a long way in preventing the recurrence of a similar situation in the future. Even though the identification of the credit counselor approved is a major hassle, the pre-bankruptcy credit counseling can make the debtor more aware of his financial situation, making him wiser in his further dealings.

Respecting the needs of the various petitioners, these sessions are provided in-office, online or by phone. The debtor has to ensure that these agencies are licensed with either the National Foundation for Credit Counseling (NFCC) or the Association for Independent Consumer Credit Counseling Agencies (AICCA).

Never treat these sessions as a hassle; but understand the truth that the Chapter 7 bankruptcy counseling is a great learning opportunity to be trained from one’s past mistakes.