Filing for bankruptcy may allow you to eliminate or reduce secured or unsecured debt balances without necessarily losing property. However, before you present your bankruptcy petition to an Indiana judge, you’ll need to show proof that you’ve undergone credit counseling. Furthermore, you’ll need to show proof that you’ve taken a debtor education course prior to having your case discharged.
What to know about credit counseling
During a credit counseling session, a professional will evaluate your current financial situation. This person may go over various debt repayment strategies and suggest alternatives to bankruptcy that may be helpful in your situation. The session should take about 60 to 90 minutes and can be done online or over the phone if you’d like.
It will cost an average of $50, and you must receive counseling from a provider that is approved by the U.S. Trustee Program. Upon completing this requirement, you’ll receive a certificate that will be included with your bankruptcy petition. The certificate is good for up to 180 days, and you may need to take the course again if it is allowed to expire.
What to know about debtor education
As with your credit counseling session, you must take a debtor education course from a provider that is approved by the U.S. Trustee Program. This course will cost anywhere from $50 to $100 and will typically take about two hours to complete. It can generally be completed online or by phone if you desire, and it will cover topics such as money management, how to create a budget and how to use credit cards wisely. Upon completion, you will receive another certificate that must be presented to the court before your case can be discharged.
Filing for bankruptcy may be an ideal way to obtain leverage over creditors. By obtaining an automatic stay of creditor collection activities, you may be able to put a temporary end to phone calls, letters or plans to seize your property. Submitting a bankruptcy petition may also enable you to get rid of negative equity on secured car or home loans.