Written by San Francisco Bankruptcy Lawyer, Jeena Cho

 
You may have heard there is a “credit counseling” requirement before you can file for bankruptcy. This mysterious counseling class seems to give many people great anxiety. In fact, it is one of the first questions clients ask about. “What is this CLASS I have to take?” It’s easy to think the the class is a semester long, and you have to pay hundreds of dollars to attend. Nothing can be further from the truth! Credit counseling classes can be completed online, over the phone or in person. It will generally take you less than an hour. Costs vary between $15 to about $50 depending on where you go. One company I like is DECAF.

The credit counseling class was part of the 2005 Bankruptcy Amendment and it’s just another hurtle for people to have to get through before filing your bankruptcy. There is one class you must take before filing and one after filing. You will be required to provide information about your income and debt (the same information required for the petition).

Aside from not having to go to an actual “class,” the other important thing to know is that there is NO grade, and NO pass/fail for the test. No one can tell you you do not qualify for bankruptcy from the class. You should be aware though that some of these credit counseling class are run by credit card companies and they may try to trick you into thinking you can afford to repay your debt. For this reason, I suggest you do a little background search on any company you select for credit counseling.

Disclaimers: JC Law Group PC is not affiliated with any credit counseling agencies.