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A bankruptcy attorney can help you navigate the complex legal maze that is the bankruptcy process, but can they help you avoid the credit counseling that is part of the requirement in this type of case? The answer is no, and there is a reason why the credit counseling requirement was passed relating to filing for bankruptcy. The reasoning behind this specific requirement is the belief that any bankruptcy lawyer or other professional can help arrange for the required credit counseling, so it would not pose an undue burden on those who file for bankruptcy protection. If the individual is facing bankruptcy the law wants to ensure that the past financial mistakes do not happen again, greatly reducing the need for another bankruptcy filing in the future. This requirement is intended to help consumers who file for this protection, not punish them, and it is not possible for a bankruptcy attorney to waive this requirement in most cases.

In most cases the bankruptcy attorney that you choose can arrange for the mandatory credit counseling session with an independent third party credit counseling service. The truth is that the mandatory credit counseling sounds worse than it is. Whether your bankruptcy attorney arranges the counseling session or you do it yourself the process is the same. You will answer numerous questions about your income, expenses, and the reasons for your financial difficulties. The credit counselor will offer advice on ways to avoid these same mistakes in the future, and express the importance of your credit rating and scores. Once this step is finished then a certificate of completion will be provided to you, or to your bankruptcy attorney if you choose. This certificate is proof to the court that you have met the credit counseling requirement, and your bankruptcy case can proceed.

While a bankruptcy attorney can not help you avoid credit counseling they can arrange it, and work with you so that you can meet this requirement. If you can not show verification that you have undergone the mandatory credit counseling then your bankruptcy attorney may choose to arrange it, or refuse to handle your bankruptcy case. While your lawyer will do everything possible to get you the desired results from your bankruptcy case it is essential that you follow the advice given by the bankruptcy attorney you have chosen. This will prevent any delays in the case, and get you the fresh financial start that you want and need. If you have a hard time financially there is help available.

If you’re looking to get rid of your credit card debt the first step is to stop charging those credit cards NOW! There are several factors that weigh into figuring how you’re going to tackle your credit card debt, 1) income, 2) amount of debt. If you weigh in those factors then you will know if you’re going to be a better candidate for credit counseling or bankruptcy and which of those options are going to work out best for you. Hopefully this article will help you with these options and you will be able to make better decisions.

Before you consider a self debt plan, bankruptcy or credit counseling you are going to need to answer the following three questions before you can make a decision:

What’s your net income every month? What are your expenses every month? What is the size of your debt, and what are your (five year ) financial goals?

Once you answer these questions you’re going to have a snapshot of your financial situation. Once you evaluate your expenses you can determine where all you money is going and really find out where you need to make your sacrifices. For example if you’re spending $25 a day on Starbucks and lunch, if you’re under a mountain of debt, you may want invest in some Tupperware and food you can pre-make at home.

Taking care of the debt yourself

If you’re lucky enough and your debt isn’t completely out of control you may optto take care of the debt yourself.

You’re going to have to do a few basic first steps in order to get your financial house in order. First off, you’re going to have to analyze your expenses and find out where you can trim fat by analyzing your spending habits. By doing this you can set aside a savings and maximize your income.

The next step is negotiating with your creditors, and communicating with each account to make sure you start with the credit cards with the higher interest rates. There are two things that you want to strongly communicate with your creditors, 1) that you are completely committed to paying of your debt and 2) you want to negotiate a lower interest rate. Most creditors will not have a problem with lowering your debt if you are current with you payments and have good payment history with the creditor. Although, there are no guarantees that your creditor is going to lower you payment it never hurts to try, some creditors are going to be more accommodating than others, but despite their cooperation don’t stop at “No!”, always try and take it to the next level if a creditor says they will not lower your interest rate and agree to your terms. Always ask for that person’s supervisor if they won’t oblige to your terms, or debt management plan and make sure you keep records of every person you talk to.

Seeking Credit Counseling

The main benefit of finding a reputable credit counseling organization is the quality of education that you will receive. Once you give a credit counselor a buzz the first step is similar to if you were taking care of the debt yourself, the credit counselor will closely evaluate your spending habits, income and expenses. Based on the three factors of income, size of debt and expenses they will recommend one of three things: 1) take care of the debt yourself, 2) a debt management plan, or 3) a referral to a bankruptcy attorney.

A debt management plan is basically a one to five year plan that will be scheduled to pay off your debt. The credit counselors are skilled at the art of negotiating with your creditors; they will fight for you and try to lower your interest rates and get better terms for your account. Creditors often are willing to cooperate with you if you are in enrolled in a debt management plan with experienced credit counselors due to the fact that a debt management plan is very structured and the terms are laid out very plainly.

There are some nightmare stories of credit counseling getting people in a messy situation where the consumer ends up worse than when they started. It’s important you practice due diligence and make sure you choose a reputable credit counselor. Here are a few things you should look out for when choosing a credit counselor:

Choose a credit counselor that will provide references Choose a non-profit credit counselor Choose a credit counselor that has been around for quite some time, and has a favorable rating with the BBB Make sure that the credit counselor discloses all fees or costs related to their debt management plan

When should you file bankruptcy?

Bankruptcy should be your last resort, and you want to explore all other options before you take the plunge into a chapter 7 or Chapter 13. Bankruptcy is serious business, and a Chapter 7 personal bankruptcy can last on your credit report for ten years and can affect your job prospects, your ability to obtain credit, and could possibly limit where you can live.

Personally filing bankruptcy can feel like a failure but if it’s your only option don’t fret. There are many successful people that have filed bankruptcy and have been able to bounce back. If you are considering filing bankruptcy, it’s actually a requirement that you seek out credit counseling 180 days prior to filing for bankruptcy so it’s highly advisable that you seek out credit counseling before you file bankruptcy because you may be blind to your options available to you.

Not everyone has a positive experience with credit counseling. Potential creditors often frown upon consumers who are going through credit counseling, denying them credit or sticking them with elevated interest rates on new lines of credit.

Some consumers, who have found themselves in this situation due to credit counseling, would tell you that you can accomplish the same things on your own. It is simply a matter of educating yourself on the inner workings of the creditor you are dealing with. Many who have dealt with the negative affects of being associated with a credit counseling company, wouldn’t have pursued credit counseling at all, had they known how it would affect their overall credit in the long run.

Credit counseling companies, of course, will have you believe that you can’t solve your financial problems without them. If credit counseling is your last stop before pulling into bankruptcy station, you may be surprised at how willing your creditors are to work with you in your time of financial hardship. Quite simply, they would rather collect something from you than have to write it off as bad debt and never see a dime from you. Credit counseling works on these principles and that is why it is so easy for credit counseling companies to negotiate with your creditors.

If you simply can not negotiate a satisfactory solution with your creditors, or you can’t deal with the stress of trying, credit counseling may end up being the best solution for you after all. Just don’t jump to that conclusion too quickly. Credit counseling has been a life saver for many consumers and a nightmare for others. You will need to personally weigh the pros and cons of using credit counseling as a means of reaching the level of financial freedom that you desire, and staying there.

Many people are asking the question, how does credit counseling work? With the current economy many people are looking for ways to resolve their debt. Credit counseling is a service that is normally run by a non profit organization and they will manage the repayment of your unsecured debts.

It is difficult to know where to turn when your debt is beginning to get the better of you. A debt management company is a great place to turn for help. Not only will they get you set up on a debt elimination plan that will help you get your debts repaid, they also offer finance educational materials, budgeting assistance and some will even help you plan for your financial future once you have become debt free.

Listed below are some of the benefits of credit counseling:

*Reduced or eliminated interest rates

*Eliminated fees

*One monthly payment

*No more collection calls

*Possible reduction in monthly payment

In most cases, your credit score will not be affected. Your score will more than likely increase as your payments are made on time and your debt decreases. Many of these organizations will charge a small setup fee and monthly fee. Neither of these should exceed $50. Many people equate nonprofit with free. Just because a company is nonprofit, does not mean that they do not have expenses. In most cases, this fee is small compared to the combined interest you are paying on all your credit cards.

If you feel like it is becoming more difficult to make your payments or manage the number of credit cards that you have, credit counseling is an option that you should consider. It will remove the stress of having to remember when all your monthly payments are due and before you know it you will see your balances begin to decrease, first slowly and then more quickly as you get to the end of your debt management program.

Getting out of debt is not going to be easy, but it is necessary. There are several small steps that you can take that will expedite the process of getting out of debt. These steps all add up and before you know it you will begin to see a dent in your credit card balances. The biggest problem people have is knowing where to start. All most people need is guide that they can follow that lays out a clear plan for paying off their debt.

Do you know how much money you spent last month? The majority of people know how much money they made but have a vague idea of how much they spent. Not having a solid control of your money both incoming and outgoing is an essential part of controlling debt. With today’s society operating primarily on credit, it is very easy for most families to spend more money than they make thus increasing the amount of their debt.

In the past, the way that families saved their money was to set aside a certain number of containers or envelopes and label them for their uses. They would then use only the container or envelope for specific purposes and when it was empty, they did not spend. Therefore, their debt was minimal (if at all) and there savings increased with each pay period. They also knew where their money was going. With today’s technology, people rarely see or handle their money and this makes it very easy to spend up to 10 percent of your income without even knowing where it went.

To begin the process of controlling debt it is important to know what you are doing with your money. This is where credit counseling can help you get on track. Most credit counseling services offer:

* Immediate decrease of monthly payments

* Decrease in the amount of collection phone calls

* Interest and fees are stopped and/or eliminated

* They show you how to manage your money to stay out of debt in the future

* You are unable to use credit cards while using consolidation services

* Ability to meet the minimum amount of unsecured debt in order to qualify for services

* When you begin consolidating your debt it could have a negative impact on your credit rating

The choice to use credit counseling services is a personal one. Finances are a very personal issue as such it is important that the service you decide upon is one that you feel comfortable talking to the representatives. There are many reputable agencies available to assist you in getting out of debt; there are also agencies that do not have the best reputation. Therefore, it is important for you to research the services you are considering and verify that they are reputable and have a good report with a large number of creditors. Remember, they are the ones you are choosing to act on your behalf. You want an agency that will be able to negotiate the best terms, which will help you in reducing your debt.

You’re in debt and your creditors won’t stop calling. Do you seek credit counseling or file for bankruptcy? Here are some things to consider. One of the benefits of credit is that the agency will try to get your debtors to work with you and reduce or waive your interest and late fees. You then make a lump sum payment to the agency every month, and the agency pays your creditors. Sounds simple, right? Unfortunately not all cases are this straightforward and go according to plan.

A Breakdown of the Percentages

According to the National Foundation for Credit Counseling, about one-third of the people who sought credit were able to manage their finances on their own afterward. That means that two-thirds were NOT able to manage their finances on their own. If your debt is too high or income too low or you suffer from an addiction such as gambling or alcoholism, then you will again fall behind on debts, being no better off after counseling than before.

If you are too far in debt for credit counseling to help you, then bankruptcy is another option. Although counseling is confidential and bankruptcy is not, Chapter 13 (which is an adjustment of debts) still may be a better choice for many people. In Chapter 13, the interest on your debts is stopped, and a court-appointed trustee will collect a monthly payment from you to pay your creditors. The plan lasts for 3-5 years, at which time, your debts will be paid. If for some reason you are unable to complete all payments to the Trustee, you can convert to Chapter 7 (which is a liquidation of assets).

In the end, you need to pick the option that you can stick to and that will help you get back on track and stay there.

Both Options Available at Many Locations

Fortunately, many counseling agencies offer bankruptcy counseling in addition in credit counseling services. Some recommend taking a bankruptcy counseling session if you’re interested in credit counseling so you understand all your options. If you’re in a situation where you’re considering your options, it is probably a good idea to consider all your options.