What Is the Role of Credit Counseling in Wyoming Bankruptcy?
What Is the Role of Credit Counseling in Wyoming Bankruptcy?
Filing for bankruptcy can provide relief for individuals who are struggling with overwhelming debt. However, before you can file for bankruptcy in Wyoming, federal law requires you to complete credit counseling from an approved agency. This step is designed to help individuals better understand their financial situation and explore possible alternatives before pursuing bankruptcy.
At Wiggam Law Office, LLC, we can provide legal assistance to the Cheyenne public and help individuals understand the steps involved in filing for
bankruptcy, including the credit counseling requirement.
What Is Credit Counseling?
Credit counseling is a financial education session required by federal bankruptcy law before filing for bankruptcy. During this session, a certified counselor reviews your financial situation, including your income, debts, assets, and monthly expenses.
The goal of credit counseling is to determine whether there are viable alternatives to bankruptcy. For example, a counselor may review whether a
repayment plan or budgeting strategy could help you regain control of your finances.
The session typically lasts about 60 to 90 minutes and can usually be completed online, by phone, or in person through a government-approved credit counseling agency.
Why Credit Counseling Is Required Before Filing Bankruptcy
The credit counseling requirement was created to ensure that individuals understand all available options before filing for bankruptcy. While bankruptcy can offer significant financial relief, it is not always the only solution.
Through the counseling process, individuals receive information about debt management plans, budgeting strategies, and financial education tools that may help them address debt without filing for bankruptcy.
If bankruptcy still appears to be the most appropriate option after counseling, the agency will issue a certificate of completion. This certificate must be filed with your bankruptcy petition.
When Credit Counseling Must Be Completed
In most cases, credit counseling must be completed within 180 days before filing a bankruptcy petition. If this step is not completed within the required timeframe, the court may dismiss the bankruptcy filing.
There are limited exceptions to this requirement in situations involving emergencies or when approved counseling services are unavailable, but these exceptions are rare.
Working with an attorney can help ensure that this requirement is completed properly and that the necessary documentation is filed with the court.
What Happens During a Credit Counseling Session
During a typical credit counseling session, the counselor will review several aspects of your financial situation, including:
- Your current income and expenses
- Outstanding debts and creditors
- Available assets
- Financial goals and challenges
Based on this information, the counselor may suggest strategies to manage debt. In some cases, a debt management plan may be proposed, although participation in such a plan is voluntary.
Even if a repayment plan is suggested, individuals are still free to pursue bankruptcy if it remains the most appropriate solution for their financial circumstances.
Credit Counseling After Filing Bankruptcy
Credit counseling is not the only educational requirement in bankruptcy. After filing, individuals must also complete a second course known as a debtor education course.
This course focuses on financial management and helps individuals learn skills for budgeting, saving, and avoiding future debt problems. Completion of this course is required before a bankruptcy discharge can be granted.
How an Attorney Can Help With the Bankruptcy Process
The bankruptcy process involves several legal and procedural requirements, including credit counseling, filing paperwork with the court, and meeting strict deadlines.
An attorney can help ensure that these steps are handled properly and that your rights are protected throughout the process. Legal guidance can also help you determine whether Chapter 7 or Chapter 13 bankruptcy may be appropriate for your financial situation.
At Wiggam Law Office, LLC, we can provide legal assistance to the Cheyenne public and help individuals understand the requirements and options involved in bankruptcy.
