There is a lot to consider if you are thinking about filing for bankruptcy. The first determination you should make is that bankruptcy is the best way for you to deal with your financial problems. Bankruptcy is an incredibly valuable tool to help you dig yourself out of a financial hole, but every case is different. As such, you will want to go through your finances with someone who is familiar with the field of bankruptcy – your attorney.
Before you file, there are some things you have to do first. Within the 180 days prior to your bankruptcy filing, you must receive budget and credit counseling from an approved credit counseling agency. During this counseling, you and your counselor will go over all possible options for your finances and budgeting. Once you complete the counseling, you will receive a certificate stating that you received the counseling. You need this certificate to file for bankruptcy. Counseling is inexpensive, but you can also request a reduced fee or free counseling if you are struggling to afford it.
Prior to meeting with a counselor, it is a good idea to first speak to a bankruptcy attorney. Not every counseling agency is a good one, and it can be difficult to separate the good from the bad. Just because a counseling agency is an “approved” one does not guarantee you will get what you need from it. Furthermore, some agencies will push debt management plans as an alternative to bankruptcy. These plans can be very helpful – but they can also be a terrible idea. Your attorney can help direct you to a reputable counseling agency and help you determine if a debt management plan is a better fit for you than filing for bankruptcy.