Before you jump head-first into your bankruptcy proceedings, you will need to show proof to the Kentucky bankruptcy court that you have successfully attended and completed credit counseling from one of their approved agencies. Read on to discover the function of credit counseling and how a seasoned Louisville, Kentucky consumer bankruptcy lawyer at Schwartz Bankruptcy Law Center can help you schedule yours.

What is the function of credit counseling in a bankruptcy filing?

The primary purpose of credit counseling is so that an agency can evaluate your current financial standing and advise whether you should go through with filing your bankruptcy petition or rather consider alternative credit relief options. Evidently, this is a pre-filing step so that you do not have to unnecessarily go through the hassle of bankruptcy. More specifically, you must fulfill this step within 180 prior to your filing date. So if an agency urges you to forgo bankruptcy, it may instead recommend any one of the following alternative credit relief options:

  • An agency may recommend that you negotiate a debt settlement agreement with your outstanding creditors so that you may have a portion of your debts forgiven.
  • An agency may recommend that you take on a part-time job, pursue additional education, or otherwise, to increase your income and pay back your outstanding creditors quickly and easily.
  • An agency may recommend that you liquidate some of your high-value assets to pay back your outstanding creditors quickly and easily.
  • An agency may recommend that establish a workable budget or debt management plan so that you may pay back your outstanding creditors over time.
  • An agency may recommend that you file for a debt consolidation loan, such as a home equity loan to pay back your outstanding creditors over time.

What are the possible exceptions to fulfilling this required step?

You may view the pre-filing requirement of credit counseling to be a roadblock in the way of your already extensive bankruptcy proceedings. While this may not be entirely true, you may find yourself in a dire financial state that requires an urgent bankruptcy filing. Though rare, you may qualify for one of the following exceptions to fulfilling this required step:

  • You may claim that no agencies, that are approved by the United States trustee or your bankruptcy administrator, are available in your district.
  • You may claim that no agencies, that use a language you understand, are available in your district.
  • You may claim that you are incapacitated or otherwise have a disability that inhibits you from participating.
  • You may claim that you are on active military duty in a combat zone, which inhibits you from participating.

Undoubtedly, there is a lot to consider before attending this counseling. So your next order of business should be to initiate a conversation with a competent Louisville, Kentucky consumer bankruptcy lawyer. Someone at Schwartz Bankruptcy Law Center will be awaiting your phone call.