How to Get a Bankruptcy Counseling Certificate
The bankruptcy process has quite a few important steps that need to be carefully followed to ensure compliance with state and federal laws. One such requirement is a bankruptcy counseling certificate.
This article is going to explain what this certificate is and offer several tips to help guide you through the process of getting one.
What Is a Bankruptcy Counseling Certificate?
A bankruptcy counseling certificate is also known as a credit counseling certificate. It certifies that you have met with an approved credit counselor. During your meeting, you will discuss things like your financial situation, alternatives to bankruptcy, and learn about sound budgeting practices.
Bankruptcy counseling certificates are required as part of the bankruptcy process. There is a certificate that you get for completing a course before your bankruptcy proceedings begin as well as a course that you complete as your debts are discharged. The second course is often referred to as debtor education or the pre-discharge course.
8 Tips to Get Your Bankruptcy Counseling Certificate
1: Consider Checking Your Credit Report
One of the first things you should do before seeking a bankruptcy counseling certificate is check your own credit report. Per federal law, you are allowed to request a free copy of your credit report once a year. The three main credit reporting companies are Equifax, TransUnion, and Experian.
You can request all three of these reports by visiting the Annual Credit Report website from your preferred web browser. You will have to answer personal information to validate your identity and receive them electronically. Once you receive them, go ahead and review them for any inaccurate information.
2: Gather Your Debt Info
The next thing you should do before seeking a bankruptcy counseling certificate is to gather all of your debt information. It is wise to collect all of the invoices you have been sent and to pay careful attention to the names of the creditors. Foraged debts, it is common for the original creditor to sell it to a third party.
Gather all of the recent invoices you have received in the past month and keep them in a file. If you requested your credit report in the previous step, check to make sure that you have copies of all invoices for your outstanding debts that are showing on your reports.
3: Itemize Your Bills
The next step to take before getting a bankruptcy counseling certificate is to itemize all of your bills. The bills you should itemize in this step are completely separate from the debt information in the previous step. This should reflect things like your housing payments, your electricity, insurance, fuel costs, groceries, and other living expenses.
It helps if you use a budgeting worksheet like the one provided by the FTC. It has a wide range of categories already listed to help with organization. You can even list the debts you have here as well.
4: Tally Your Income Sources
The next step in getting your bankruptcy counseling certificate is tally all of your income sources. This includes income from things like child support, dividend payments, and other miscellaneous sources. If your income fluctuates each month due to changing workloads, try to average your earnings for the previous two months.
It is crucial that you keep copies of your paystubs or bank deposits. Specialists often request these records as part of the debt counseling process. Also, your attorney needs them as well. Make photocopies as needed and store them in a secure place.
5: Add Your Assets
Assets consist of things like stock holdings, vehicles that you already paid off, savings, and other valuable possessions. It is very important that you take your time and attempt to account for any assets you may have. This includes things like joint bank accounts as well. Itemize your listings and tally the approximate value of all your holdings.
6: Start Your Search
Make sure that your credit counselor is a professional with licenses and approvals for your area. You can find a listing of approved credit counselors for your state by visiting the Department of Justice website and entering your state. It is important to note that some of these agencies are for profit and others are not.
We highly recommend you to browse the available selections and pick an agency that best suits your needs. Be sure to ask about things like how long they have been in business, the methods that you can complete your counseling, and how long it takes to receive your certificate.
7: Educate Yourself
The whole point of credit counseling is to help educate you about sound financial decisions. Be sure to discuss any questions or concerns you may have with your counselor. They have worked with a wide array of people in situations very similar to yourself and can likely point you in the direction of valuable resources.
8: Complete the Course in Time
You can complete the course in up to 180 days before you file for bankruptcy. If you have already filed for bankruptcy, it is important to note that you only have 15 days to submit your completed certificate from your filing date. If this is the case, it is best to choose agencies that provide instant certification options once you complete your course.
Avoiding Scams While Completing Your Bankruptcy Counseling Certificate
One important thing to remember when completing your bankruptcy counseling certificate is that you should always be aware of potential scams. The main thing that you can do to avoid this is to make sure you are working with a licensed debt counselor from the Department of Justice website.
Signs of a potential scam include guarantees that they can erase your debt without bankruptcy and ask for payments up front. For more information on preventing potential scams while using credit counseling, check out the FTC website.
By following these eight tips, you should be well on your way to getting your own bankruptcy counseling certificate. All it takes is a little bit of time and preparation to make sure that you have all the documents and information you need to make the process a success. If you have already received your own certificate, tell us about your experience in the comments section.