Pre-filing credit counseling at a glance
By Brigitte Yuille • Bankrate.com

So, you've decided to file for bankruptcy to get rid of your mounting debt. Well, a new requirement has been added to the revamped bankruptcy law. Consumers will have to proceed with pre-filing and post-filing credit counseling. Here's a preview of what you may encounter through the different vehicles of participating in pre-filing credit counseling in person, by phone or over the Internet.

General overview of session

In person On the phone Over the Internet Client is presented with bill of rights and disclosure form. Asked to read through, sign and date. Counselor reads an abbreviated version of the client bill of rights and disclosure form to client. Client is asked to acknowledge provisions of the client bill of rights and disclosure form. Counselor questions client to determine how the person developed the debt. Counselor questions client to determine how the person developed the debt Client fills out questionnaire to determine how he or she developed the debt. Counselor pinpoints financial problems by reviewing credit report(s), monthly income, expenses, liabilities and assets. Counselor pinpoints financial problems by reviewing credit report(s), monthly income and expenses, liabilities and assets. Client is asked for authorization to pull credit report(s). Client inputs monthly income, expenses, liabilities and assets. Counselor develops budget with client by stripping away unnecessary expenditures and determining where and how the client can save money. Counselor goes over common options to end debt: For example, negotiating debt settlements with creditors or working out a debt-management plan. Counselor develops budget with client by stripping away unnecessary expenditures and determining where and how the client can save money. Counselor goes over common options to end debt: For example, negotiating debt settlements with creditors or working out a debt-management plan. During a live chat, the counselor may develop a budget with the client by stripping away unnecessary expenditures and determining where and how the client can save money. If the chat does not occur, the information may be submitted to an Internet counselor who will process the information and include the budget analysis. Client reads common options to end debt: For example, negotiating debt settlements with creditors or working out a debt-management plan. A summary packet is printed and given to the client. A summary packet is e-mailed, mailed or picked up at the counseling agency. A summary packet is e-mailed, mailed or picked up at the counseling agency. Client receives and signs certificate. Certificate is e-mailed, mailed or picked up at the agency. Certificate is e-mailed, mailed or picked up at the agency.

Bankrate.com's corrections policy

-- Posted: March 3, 2006