Before you can file a consumer bankruptcy petition, you must first obtain a Certificate of Credit Counseling.
You can find the list of approved credit counseling agencies by going to the U.S.Trustee's website: Here and then click on 'Credit Counseling and Debtor Education'. Only a credit counseling agency from the approved list can issue you a certificate of credit counseling which will allow you to file a consumer bankruptcy petition.
If you are on social security, or are unemployed, or have some hardship, you definitely should inquire about asking the agency to waive any fee.
You should comparison shop for an agency. Therefore, visit their websites and ask what their fees are.
Many of the agencies are charging $50 per household. So if a husband and wife file for bankruptcy, the total fee is $50 versus $50 per person which would be $100.
Also, some people prefer not to have to use a computer and answer questions, and you can conduct the session over the phone but you have to check on how they deliver their services.
The credit counseling session is suppose to last 2 hours but many of the providers simply have you enter your information on their website and then you call them and within a very short time, they issue your Certificate of Credit Counseling.
Before you use an Agency, you must check on their method of payment. They want to be paid more than they are really interested in providing you with real counseling. Some will accept a debit card or a deduction directly from your checking or savings account. If you have to mail the payment to them, the mail gets lost and it take time to post and clear the money and if you are desperate to file because you are in foreclosure and you want to stop the foreclosure, I advise not to mail them the payment but find some means to pay via electronic debit or wire the money through Western Union because can be of the essence.
Note of Caution: You should thoroughly prepare your budget information before you obtain your credit counseling. Why? If you have had budget counseling, you have to file your Certificate of Counseling along with your Credit Counseling Budget with the Court. Then on your bankruptcy petition, you have to complete the same information. What happens if your credit counseling budget information is substantially different than the information in your bankruptcy petition? Potential problems could arise. This has not happened yet that I have seen but the possibility is there. And then you could be thrown into an adversarial tornado with the Bankruptcy Court because you didn't spend the time to thoroughly review your information.
This is a real potential trap for the unwary. And I know how consumers can be so careless in writing out their budgets that I have had many clients submit to me there budgets and I can easily tell how they haven't been budgeting and consequently, they present without know it that they have substantial excess income at the end of the month. And when I ask them, 'Do you have $500 left over at the end of every month?' , they shake their heads and say, 'No way. I wouldn't be here in your office if I had that much money left over every month.' And then, I say to the client, 'Well, let's look at what you stated were your expenses. And do you see where you stated that you had $500 excess income every month?' And the client looks at me with a puzzled look, 'Did I put that there. Oh, no, I guess I made a mistake. I don't have that kind of money. No way Jose.'
Now I want to make it clear that I am only advising you to be accurate and correct and truthful. I am not advising anything else. Further, the Trustee will see all your pay stubs for the last 180 days and has national guidelines to judge your expenses. And the Trustee will have guidelines for the 'means test'.
But if you are careless in reporting your income and expenses to the credit counseling agency, this can come back to bite you.
