Article by Simon Volkov
Credit counseling is a necessary requirement when filing for personal bankruptcy protection. Consumer credit services are also a good choice for people struggling to make ends meet; young adults starting independent lives; and newly married couples who desire to begin their union with strong financial traction.
Credit counseling agencies are located in most major cities. Agencies charge a fee for services rendered. However, there are non-profit consumer credit counseling centers offering reduced or no-cost services to those who qualify.
Current economic turmoil has created a high rate of unemployment forcing millions of Americans into foreclosure and bankruptcy. When borrowers face losing their home to foreclosure they often turn to bankruptcy to stop the foreclosure process or end creditor harassment.
Filing personal bankruptcy should be a last resort. However, if no debt relief options exist, bankruptcy can help debtors eliminate a portion of debts. It?s important to note that bankruptcy remains on credit reports for up to ten years. It is a blemish that can prevent consumers from obtaining future credit and requires a concerted effort to repay debts through chapter 13 payments.
Congress enacted the Bankruptcy Abuse Prevention and Consumer Protection Act in 2005. The new bankruptcy laws require debtors to obtain credit counseling no more than six months prior to filing. A certificate of completion must be presented to the judge in order to obtain bankruptcy approval.
Debtors must obtain credit counseling help through an agency approved by the U.S. Trustee Program which is managed by the Department of Justice. Financial experts recommend utilizing the services of a Trustee Program agency prior to petitioning the court for bankruptcy protection. Doing so may eliminate the need for filing bankruptcy altogether. If not, debtors? will have met required BAPCPA credit counseling requirements.
When debtors obtain credit advice from agencies outside the Trustee program, it is strongly recommended to conduct research prior to signing a contract. The most trustworthy source for verifying credit consumer counseling credentials is through the Better Business Bureau. The BBB verifies if a company is in good standing or if complaints have been filed.
The U.S. Financial Literacy and Education Commission established MyMoney.gov to assist consumers requiring consumer credit services. Presently, MyMoney.gov provides a complementary ?My Money? toolkit which includes brochures, pamphlets and a variety of money management information and credit repair resources.
Public libraries are a good source for locating debt reduction information. Not only do libraries contain an abundance of books, they also offer home study courses, videos, and publications. Topics range from budgeting, debt consolidation, eliminating credit card debt, and personal investment strategies.
Gaining control over personal finance is empowering. Several options exist for those who truly want to get out of debt. Take time to become educated about credit repair options and learn strategies that can help you pay off credit cards, become debt-free and invest for your future.
About the Author
Investor, Simon Volkov, specializes in helping consumers facing financial difficulties. His website provides information regarding credit counseling, debt reduction, bankruptcy, and personal finance. Learn more by visiting www.SimonVolkov.com.
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