If you are planning to file bankruptcy, you have to attend a consumer credit counseling session first. This has been made mandatory as per the new federal bankruptcy laws that were introduced on 17th October 2005. The law says that you will have to take the consumer credit counseling session 6 months prior to bankruptcy filing. The duration of the course is approximately 90 minutes and the amount you have to shell out for the credit counseling session is not more than USD$50.

The pre-bankruptcy briefing is usually done to make you aware of the various other options that you can opt for. There are different ways in which you can take the session. It can be –

* One-on-one
* Over the internet
* Over the telephone
* In-person counseling
* In groups

When consumer credit counseling was made mandatory as per the new federal bankruptcy laws, many credit counselors tried to get their names enrolled to be on the list of approved credit counselors. However, only few qualified for the same. You need to avail credit counseling session from a credit counselor that is approved by the government. The new federal bankruptcy laws are administered by U.S. Trustee Program of Department of Justice.

The new federal bankruptcy laws have made it necessary for debtors to undergo 2 courses. One is consumer credit counseling and the other is a course on personal financial management. However, this hasn’t gone down well with all. Consumers are questioning the effectiveness of the pre bankruptcy briefings especially when debtors are on the verge of filing bankruptcy. Some say the timing of the program isn’t right and since it’s not a free program, it adds to the existing financial burden of the debtor.

How can consumer credit counseling help you?

When you attend a credit counseling session, the credit counselor will first evaluate your financial situation. He will take into account your income, expenses and also the amount you are paying every month for paying off your debts. Thereafter, he may prepare a budget for you to manage your finances according to the budget. Consumer credit counseling has helped many to get out of debt and helped many consumers to attain financial freedom.