Credit Counseling and Bankruptcy: 3 Things to Know

Since 2005, those who wish to file for Chapter 7 bankruptcy have been required to fulfill two additional requirements. The first of these is the ability to demonstrate that one’s financial circumstances enable them to pass the “means test”, which assesses a debtor’s income and expenses to determine whether it would be reasonable to expect payment to creditors. The second additional requirement is that persons who wish to declare bankruptcy must undergo credit counseling before they can file.

If you are facing financial difficulty and want to file for bankruptcy but are unsure about how to ensure that you are in compliance with credit counseling requirements, we can help. Contact the Arizona bankruptcy lawyers of the Harmon Law Office, LLC, at 480-829-0494 today to schedule a free consultation. We are committed to helping our clients gain a fresh financial start.

Important Details about Credit Counseling Requirements

The aim of the credit counseling requirement is to help debtors to better manage their finances in the future so that they can avoid falling into the same position. In some cases, by applying the tools and knowledge gained in credit counseling, a debtor may be able to make adjustments to avoid bankruptcy altogether. The following are some things you should know about bankruptcy-related credit counseling:

1. In order to file for Chapter 7 or 13 bankruptcy you are required to undergo credit counseling.

This is a requirement for both Chapter 7 and 13 and the applicant must file proof of having completed credit counseling within 180 days prior to filing for bankruptcy.

2. Persons who suffer from mental illness or disability may be exempt from this requirement.

Because it is perceived that credit counseling may be of little benefit to persons suffering from mental illness or disability, they may not have to complete credit counseling.

3. Deployed members of the military may be exempt.

Military servicepersons who are deployed or are in a deployment area are granted an exemption from the credit counseling requirement because of the practical impossibility of completing the counseling and the need for swift intervention.

Contact Us

To speak with a qualified legal representative about your options to address your current financial situation, contact the Arizona bankruptcy lawyers of the Harmon Law Office, LLC, at 480-829-0494.