How can credit counseling help you during your bankruptcy?

On Behalf of | Sep 12, 2024 | Bankruptcy |

Before filing for either Chapter 7 or Chapter 13 bankruptcy, you must complete a mandatory credit counseling session. Even though it is a requirement, many people going through bankruptcy neglect to fully capitalize on the benefits of credit counseling. 

The counseling session provides an overview of your financial situation and offers guidance on the next steps to take in bankruptcy. Credit counseling can help you evaluate your options and ensure that you are making informed decisions about your financial future.

Understanding the credit counseling requirement

In North Carolina, the credit counseling requirement ensures that you are aware of the potential consequences of filing for bankruptcy. This is also the time to make the necessary preparations for the process.

During the session, a certified counselor reviews your financial situation. They will closely examine your income, debts and expenses. The counselor will discuss possible alternatives to bankruptcy, such as debt consolidation or a payment plan. If bankruptcy seems necessary, the counselor will guide you through the next steps.

How credit counseling helps with budgeting and debt management

One of the most valuable aspects of credit counseling is that it helps you understand your spending habits and how to create a budget. The counselor assists in developing a plan for managing expenses, both during and after bankruptcy. Taking credit counseling seriously will help you better manage your finances and avoid future financial troubles.

Credit counseling focuses on education and budgeting advice to make the bankruptcy process more manageable. Taking the counseling session to heart often helps individuals prepare for the financial challenges that come with bankruptcy.

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