What Information Does a Credit Counseling Course Cover?

Taking a credit counseling course is required by law before you can get approved for a bankruptcy. If you can not prove that you have been through a credit counseling course, the judge is going to throw out your case. Anytime your potential bankruptcy case is dismissed, it can be very discouraging. This makes going through a credit counseling course very important if you want to see if you qualify for a bankruptcy. A typical credit counseling course covers a lot of information. Here are a few things that you can expect to cover in a credit counseling course. 

Assess Situation

One of the first things that they will do in a credit counseling course is to help you assess your situation. When you are dealing with the potential of filing bankruptcy, they want you to realize exactly where you are and how you got there. They will sit down and look at all of your finances with you. They will look at exactly how much debt you have and assess your different accounts. You will go over your income and assets as well. In order to figure out which direction you should go, you first have to see exactly where you are at. 

Look at Options

After you have properly assessed where you are, the course will cover some of your different options. Many people do not realize that you have a lot of different options besides simply filing bankruptcy. Bankruptcy should be looked at as a final resort, not the only option. If you are in serious financial trouble, you could possibly go a few different routes to get help. 

One option that you could consider is a debt management plan. With a debt management plan, you call and negotiate a payment plan with all of your creditors. They may agree to an interest rate reduction on what you are paying now and a smaller payment. You set up a payment plan with them over a certain period of time and stick with it. This type of plan will not hurt your credit nearly as bad as a bankruptcy would. Therefore, the credit counseling course will recommend this if it is feasible.

Another option that they will go over with you is a debt settlement. This option is usually only available if you have some kind of cash to work with. Your creditors may be willing to take a cash settlement and close out your account for you. They may settle for much less than what you owe as long as you pay them in cash immediately. 

Consequences of Bankruptcy

In addition to looking at your options, they will also go over exactly what will happen if you file bankruptcy. Your bankruptcy will hurt you financially for many years to come. The credit counseling course will try to get you to realize that this is a long term solution, not a short term fix. Also, they will stress the things you will need to do to end your bad behavior and make more responsible decisions with your money, moving forward.

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