Bankruptcy- The Ultimate Solution

Is bankruptcy the real relief you are looking for? Are there any other alternatives to bankruptcy? What are the steps involved and how it is going to impact your life? Know all before you get on to your decision for filing for bankruptcy.

Bankruptcy filing may be the last resort for people and the most unwanted situation to be in. If one fails to keep a tab on their expenses and give in to every desires of their own there is no denying to the fact that the financials will not be in a good shape. Nowadays almost everyone take up bad credit personal loans to fulfil their desires without caring much about their financials and the repaying capacity. Most of the people do not take emergency situations into account while planning their budget. There are still others who do not think a bit even about the repercussions of not paying their debts timely or regularly. Loans have become a part of life and there is hardly anyone who could be found without any loans.


All these have seen a huge increase in the number of people who are financially strapped into the EMIs and are left with little to no disposable income monthly. The resultant is that such people are forced to live a life which is dependent on the paycheck. Any situation which threatens their paycheck , threatens their existence too. Situations like recession has seen a large number of people standing on the gates of bankruptcy. The situation is such that the lenders are set to lose a huge amount of money and they will never be able to repay their debts.

Bankruptcy may sound like a great idea for the people who are under great stress owing to calls from the collectors and the creditors follow-ups but they need to understand the procedure involved and the way to proceed with bankruptcy filing. Understanding it all will help assess your decision with respect to your current financials and the way bankruptcy will affect your life.

Before filling the form of bankruptcy and getting the aid there are some formalities which an individual has to go through and fulfil.

Dealing with your loans:

 It is always advisable to track your loans and if possible talk and settle the smaller loans or the loans which do not have higher dues on them. This will ease out your debt situation and also help you maintain the relationships with some of the creditors who will always respect your decision that you pad them in spite of your worst financials.

Getting bankrupt is the most helpless situation. It is the state of financial crisis when the individual is out of all the resources to pay back the money to he debtors. So the individual seeks some assistance from government and other agencies to help him get out of such situation. When an individual considers bankruptcy he should seek some legal formalities. In order to get bankruptcy protection one should get credit counseling from any government approved organization before filing for it, within 180 days. Before the debts get discharged one should have completed a debtor education course.

The approved credit counsellors and debtor educators are:

  • Education and counselling requirements
  • Credit counsellor to be chosen
  • Help and information

Approved Credit Counsellors and Debtor Educators

For any individual who is filing for personal bankruptcy the department of justice’s US Trustee Program approves organisations to provide credit counselling and debtor education required by them. The educators and counsellors who have been appeared on the US program can advertise for debtor and counselling education.

Counselling and education Requirements:

Pre-discharge debtor and pre-bankruptcy credit education is not available at the same time always. Before filling for bankruptcy credit counselling must take place and the education of debtor takes place after that.

While filing for bankruptcy one must file a certificate of credit counselling completion and evidence of completion of education of debtor education after filing for bankruptcy and before the discharging of debts. These certificates are provided only by US trustee program approved credit counselling organisations and debtor education course provider. The certificates which are provided are numbered and are produced through a central automated system so that there is no fraud

  • Pre-bankruptcy counselling-

An evaluation of the financial situation, discussion of alternatives to bankruptcy and a budget plan should be included in a pre-bankruptcy counselling session. The counselling can take place on phone, in person or online and it should usually last for 60 to 90 minutes. The individual who can not afford to pay for the counselling they are provided with free counselling by these organisations. Otherwise the individual may be charged with fees, which is generally $50, depending on various factors such as types of services or the place one lives.

Discuss the fees before going for any session.

One should get a certificate after the counselling as a proof. One should check from the organisations about the fees charged so that they do not charge more.

  • Post-filing debtor education

The debtor education from an approved counselling should include information about managing money, using credit wisely and developing a budget. Similar to above, here also the counselling can take place on phone, in person or online. But here the time period can increase up to two hours. Also the fees can be in between $50 to $100. Whereas when an individual is unable to pay that amount, he should seek the organisation and ask for concession.

One should receive the certificate once an individual has approved the counselling. This is an important certificate therefore one should seek to attain the certificate approved in the judicial district where one has filed for bankruptcy. Also this is different from the certificate one receives after completing the pre-filing credit counselling, it should be kept in mind. One can’t be charged for extra fees unless the debtor education provider tells one that there is a fee for certificate.

Choosing a credit counsellor

To fulfil the bankruptcy law requirements, if an individual is looking for credit counselling, one should try to get it from the approved providers for the judicial district. Check for different credit counsellor provider and once the list is with the individual, one should make sure to go through it properly and chose the best. There are some key questions which one needs to ask, they are:

  • The services offered by the them
  • Whether they will help in developing a plan to avoid any problem in future
  • The fees
  • Can they give concession on fees?
  • The qualifications of the counsellors.
  • The provision of keeping the information secret and secure
  • What is the salary of the employees and whether the individual will have to make the contribution to the organisation

Help and information

It is the duty of the US trustee program to promote efficiency and integrity in the nation’s bankruptcy system by enforcing oversees private trustees and bankruptcy laws. The US have the program in 21 regions and 9 field offices, and also oversees the bankruptcy administration in all states except North Carolina and Alabama.

In case of any doubt one can visit the credit counselling agencies. It is very essential to chose the best and in order to get them try to go through all the details provided.