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Filing for personal bankruptcy requires mandatory counseling

California consumers who are facing financial difficulties may be looking for ways in which to re-establish financial stability. Personal bankruptcy may be the best opportunity to get back on track -- even if it does not provide an overnight solution. However, filing for bankruptcy is a complicated process and may be best navigated with the support of a professional to provide guidance at every step of the way.

The U.S. Bankruptcy Code provides the opportunity to have debts discharged, but it also requires counseling to explain how the process works and how to manage debts in the future. In fact, before a court will accept a bankruptcy filing, the applicant must provide certification to prove the completion of pre-filing counseling within the past 180 days. These sessions will also inform the filer of other debt relief options to allow him or her the ability to make sure bankruptcy is the route to take.

Depending on the type of bankruptcy filed for, the length of the journey will take up to six months for Chapter 7 and between three and five years for Chapter 13. Before the court will discharge any debts, the filer also has to complete pre-discharge counseling sessions and provide a certificate of proof. This counseling is more focused on managing budgets, avoiding financial risks and teaching consumers how credit scores work.

A consultation with an experienced bankruptcy attorney can assist the client in understanding the process, including the means test, and determining which Chapter will be appropriate for his or her unique circumstances. Although not a quick-fix, personal bankruptcy can provide a California consumer a fresh start while also providing valuable skills in personal debt management. As soon as an individual has filed for bankruptcy, an automatic stay comes into effect that will prevent any further debt collection actions.

Source:, "Bankruptcy Counseling: What It Is, What to Expect", Sean Pyles, May 18, 2016

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Thomas F. Miles, Attorney and Counselor at Law
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