Before you can file for Chapter 13 or Chapter 7 bankruptcy protection in either New Jersey or Pennsylvania, you have to consult a non-profit credit counseling agency. This is required by law and the primary purpose of such a consultation is to figure out whether or not there is way for you to handle your debt outside of bankruptcy without adding additional significant fees to what you owe.
Bankruptcy Credit Counseling Requirement
In order to receive bankruptcy relief, you have to be able to show that you went through this bankruptcy counseling from an approved U.S. Trustee’s Office provider within 180 days prior to filing for bankruptcy.
The agency will provide you with a certificate of completion when you are done and you must file this within 15 days following the bankruptcy filing date. They will also give you a repayment plan copy if you have created one directly with your agency. The purpose of credit counseling is to give you more clarity about whether or not you do need bankruptcy.
Even if it is clear that a repayment plan in your situation is not feasible, credit card balances that are driven higher by penalties and high interest rates are very not affordable for many filers, in addition to emergency room expenses and other judgments associated with repossessed car auctions. The bankruptcy law mandates that you participate in counseling, not that you agreed to whatever the agency proposes as a resolution.
Even if a repayment plan could be possible, you are not responsible for agreeing to it. It is recommended that you sit down with an experienced bankruptcy attorney to figure out what is truly in your best interests at the outset of your case.
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The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.