Is credit counseling required before filing for bankruptcy?

New York residents thinking about filing for bankruptcy may wonder if credit counseling is a necessary part of the process. Before a person can file for bankruptcy, credit counseling is a requirement that must be completed.

A consumer may not receive pre-bankruptcy credit counseling from just anyone. In order to fulfill the requirement, the individual must select a credit counselor that is approved by the Department of Justice’s U.S. Trustee Program. A list of approved credit counselors is maintained on the U.S. Trustee Program’s website. Unless a counselor appears on that list, they would not be able to provide a consumer with the appropriate certificate of proof that the counseling was completed. In addition to selecting a counselor who fulfills the bankruptcy requirement, a consumer may wish to choose a counselor based on the services that they offer and their qualifications.

A credit counseling session normally lasts between 60 and 90 minutes and costs about $50. If a person is not able to pay the fee, a fee waiver may be granted to the consumer from the counseling organization. This waiver should be requested before the counseling session takes place. Because credit counseling fees can vary, this information may not be true for every credit counseling session.

An individual may decide to seek credit counseling if they wish to fulfill the bankruptcy requirement but are still unsure if they will actually file for bankruptcy. People in this situation may also choose to meet with a bankruptcy law attorney. After evaluating a person’s unique financial situation, such an attorney may be able to advise them as to whether filing for bankruptcy would be beneficial to them.

Source: The Federal Trade Commission , “Filing for Bankruptcy: What to Know“, September 21, 2014