Some of the approved credit counseling agencies offer debt management plans (also called DMPs).  A DMP is a plan to repay some or all of your debts in which you send the counseling agency a monthly payment that it then distributes to your creditors.

Debt management plans can be helpful for some consumers.  For others, they are a terrible idea.  The problem is that many counseling agencies will pressure you into a debt management plan as a way of avoiding bankruptcy whether it makes sense for you or not.  You should not consider a debt management plan if making the monthly plan payment will mean you will not have money to pay your rent, mortgage, utilities, food, prescriptions, and other necessities.

It is important to keep in mind these important points: [Read more…]

You must receive budget and credit counseling from an approved credit counseling agency within 180 days before your bankruptcy case is filed.  The agency will review possible options available to you in credit counseling and assist you in reviewing your budget.  Different agencies provide the counseling in-person, by telephone, or over the Internet.  If you decide to file bankruptcy, you must have a certificate from the agency showing that you received the counseling before your bankruptcy case was filed.

Most approved agencies charge between $30/-/$50 for the pre-filing counseling.

If you decide to go ahead with bankruptcy, you should [Read more…]

Bankruptcy is a legal proceeding in which a person who can not pay his or her bills can get a fresh financial start.  The right to file for bankruptcy is provided by federal law, and all bankruptcy cases are handled in federal court.  Filing bankruptcy immediately stops all of your creditors from seeking to collect debts from you, at least until your debts are sorted out according to the law.

Source:  Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.

Although it may be possible for some people to file a bankruptcy case without an attorney, it is not a step to be taken lightly.  The process is difficult and you may lose property or other rights if you do not know the law.  It takes patience and careful preparation.  Chapter 7 (straight bankruptcy) cases are somewhat easier.  Very few people have been able to successfully file chapter 13 (reorganization) cases on their own.

Source: Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Here is what the Kansas Bankruptcy Court says about filing bankruptcy without an attorney:

It is very important that a bankruptcy case be filed and handled correctly. The rules are very technical, and a misstep may affect a debtor’s rights. [Read more…]

A decision to file for bankruptcy should be made only after determining that bankruptcy is the best way to deal with your financial problems.  This brochure can not explain every aspect of the bankruptcy process.  If you still have questions after reading it, you should speak with an attorney familiar with bankruptcy.

There have been many news reports suggesting that changes to the bankruptcy law passed by Congress in 2005 prevent many individuals from filing bankruptcy.  It is true that these changes have made the process more complicated.  But the basic right to file bankruptcy and most of the benefits of bankruptcy remain the same for most individuals.

Source:  Answers to Common Bankruptcy Questions Pamphlet
National Consumer Law Center, Boston, MA
www.nclc.org

Remember:  The law often changes.  Each case is different.  This pamphlet is meant to give you general information and not to give you specific legal advice.