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What is bankruptcy counseling?

If you have found yourself in an unmanageable debt situation, and after carefully reviewing your options have concluded that personal bankruptcy is the proper path for you to take to get out of that situation, then before you can either discharge your debts under Chapter 7 or come up with a payment plan under Chapter 13 there are some additional steps that you may need to undertake. These involve credit counseling and debtor education.

Even if you have already concluded that filing for bankruptcy is right for you, under the system of bankruptcy law you may still be required to undergo credit counseling within 180 days before you will be allowed to file a petition in bankruptcy. The reason for this is to make sure that you have carefully considered your decision and are aware of other possible debt relief alternatives to bankruptcy.

Credit counseling normally does not take long, and you can undertake it in a variety of ways including in person, by telephone or online. One thing to be aware of aside from the 180 day requirement is that the credit counseling organization must be approved by the government.

Once you have completed credit counseling and have filed your petition for bankruptcy, another educational step that you will need to complete his debtor education. Debtor education is similar in many respects to credit counseling in that you can ordinarily completed within a day, often within one or two hours, you can participate personally, over the telephone or online, and you need to receive it from a government approved provider.

Debtor education is a prerequisite before your debts may be finally discharged.

For both credit counseling and debtor education, upon successfully completing the requirement you will receive a certificate as evidence of such completion.

This post provides only an overview of credit counseling and debtor education requirements under bankruptcy law. Additional information may be found online, or you may contact this firm if you would like more information.

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At the law offices of William H. Oliver, Jr. & Associates in Toms River and Lakewood, New Jersey, we represent clients in Toms River, Neptune, Trenton, Middletown, Red Bank, Wall, Lakewood, Lakehurst, Manchester, Asbury Park, Old Bridge, Jamesburg, Barnegat, Forked River, Manahawkin, Ocean Township, Brick, Manasquan, Howell, Freehold, Hazlet, Bradley Beach, Brown Mills, Long Branch, Keansburg, Marlboro, Bayville, Beachwood, Whiting, Sayreville, South River, East Brunswick, Monmouth County, Ocean County, Middlesex County, Burlington County and Mercer County.