New Yorkers who find themselves in a black hole of debt may consider filing bankruptcy. As part of the requirements for either Chapter 7 or Chapter 13, the filer will likely have to take at least two classes at specific points in the process.

The team at Corash & Hollander, P.C., wants to ensure you prepare for the bankruptcy process, regardless of what chapter you file. Credit counseling classes are part of the bankruptcy process and may help provide the court, and you, with valuable information. Become familiar with the basics of each type.

Pre-bankruptcy filing

Within the 180 days before filing for either Chapter 7 or 13 bankruptcy, you must attend a credit counseling class. The class serves a couple of purposes. First, it satisfies the court requirement that you attend and submit proof along with your bankruptcy papers. More importantly, it serves as a means test, a way for the group or company providing the class to assess whether bankruptcy is necessary in your case. The company puts together a recommendation to the court of a payment plan it believes you can handle without going through the bankruptcy process. If the court agrees, it may change your filing status, if applicable, from Chapter 7 to Chapter 13.

Post-bankruptcy filing

After filing for bankruptcy, you will need to take a debtor education class. In this atmosphere, you will learn tools to help you manage finances in the future, and help ensure you do not wind up back in the same predicament down the road. The class focuses on creating budgets and rebuilding credit. The court requires completion of the class 60 days before meeting with creditors, a step in the bankruptcy process.

Bankruptcy can help people get back on their feet. Should you find yourself considering it, follow the link to our webpage for more details on the process.