Whether you’re filing for Chapter 7 or Chapter 13, one of the pre-bankruptcy requirements is completing credit counseling. Often times, people who are unsure about filing for bankruptcy use credit counseling as an excuse to avoid the procedure. They don’t want to deal with the hassle, even if a New Port Richey bankruptcy attorney is there to simplify every step of the bankruptcy process. However, there are many enduring benefits to credit counseling that anyone in a financially precarious position should consider.
Credit Counseling is a Part of Bankruptcy
Instead of viewing credit counseling as a separate procedure, view it as a tool meant to help your bankruptcy filing succeed. Remember, a bankruptcy is meant to give you a fresh financial start and the skills you learn through credit counseling empower you to thrive after your bankruptcy. Even though a bankruptcy attorney will guide you through the process, it’s your day-to-day financial decisions that will determine the long-term success of your bankruptcy. This is why credit counseling is so important and should be taken seriously by you and your bankruptcy attorney alike.
Benefits of credit counseling include:
Debt Management Services. It’s not a requirement that you sign up with debt management services during credit counseling, but this option is available. With this service, the counseling service will collect a monthly fee, negotiate your interest rates, and forward your payments to the creditors. Think of this as a middleman that acts in your best interest.
Lower Interest Rates. Even if you don’t take advantage of debt management services, it’s possible to achieve lower interest rates through credit counseling. Anywhere from a 5-30% reduction in your current interest rate can make a huge difference. Couple this with the benefits that your bankruptcy attorney will help you achieve and you’ll manage your debt in no time.
Having a Strategy. Credit counseling will prepare you for the bankruptcy process, ensuring that you’re ready to work with a bankruptcy attorney. You’ll find it’s easier to discuss your finances with your bankruptcy attorney after the counseling, which can help smoothen the entire bankruptcy process.