Part of the process of declaring bankruptcy in the United States involves going to see a credit counselor. Some people may not understand why they have to see a credit counselor before declaring bankruptcy, but the answer makes good financial sense.

Identification

According the Bankruptcy Abuse Prevention and Consumer Protection Act made law by the United States Congress in 2005, anyone seeking to file bankruptcy must complete credit counseling before filing.

Time Frame

The credit-counseling obligation must be at least one session completed within 180 days of filing for bankruptcy. According to credit.org, the session must be at least 90 minutes long.

Considerations

The U.S. Department of Justice offers an index to finding the government-certified credit counselors that will complete your obligation. For the counseling to count toward your bankruptcy, it must be done with a government-certified counselor.

Features

According to the Federal Trade Commission, one of the goals of credit counseling before bankruptcy is to identify and eliminate the behaviors that lead to bankruptcy in the first place.

Debtor Education

Another required course is a two-hour long course called a debtor-education course. Debtor education is taken after bankruptcy has been filed and is designed to help you budget your money around your new financial arrangement.

Source:

Credit.org: Bankruptcy Counseling

Federal Trade Commission: Before You File for Personal Bankruptcy

Resource:

U.S. Department of Justice: Approved Credit Counseling Agencies