How Will Pre-Bankruptcy Credit Briefing Give You Debt Relief?

As per the new Federal Bankruptcy Laws that were introduced in October 2005, a debtor is required to take pre-bankruptcy credit briefings to get debt relief. The Congress has included this provision so that a debtor can avoid filing bankruptcy. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 makes it mandatory for a debtor to get debtor education and attend credit counseling session from providers approved by the Department of Justice’s Trustee Program in United States. Not all providers qualify to give pre-bankruptcy credit briefings and every provider should fulfill certain criteria.

How will credit counseling as pre-bankruptcy credit briefing give you debt relief? You have to look for a provider who is approved in your district. Once you find out a credit counselor, you can contact him to find out how you can get debt help. The credit counselor will evaluate your prevailing financial condition. The causes of your financial hardship are also assessed. Thereafter, the credit counselor will develop an action plan. A repayment plan is prepared according to which you can pay off your debts and get debt relief.

However, not all debtors benefit from the credit counseling session. This is because there are many debtors who have fallen into a debt trap and credit counseling or debtor education will help them in no way. These debtors are left with bankruptcy as the only way to get rid of debts.

If you are aware that pre- bankruptcy credit briefing cannot make you debt free, you still have to attend the credit counseling sessions. The reason is at the end of a credit counseling session, the credit counselor will issue a counseling certificate which is required if you want to file bankruptcy. Along with the counseling certificate you are also required to produce the repayment plan. So, you cannot avoid the pre-bankruptcy credit briefing session.

Prior to filing bankruptcy, debtors usually try the other debt relief options that include debt consolidation, debt settlement, debt management or DMP or a Self Repayment Plan. The main objective of these debt solutions is to reduce your debt load. This is usually achieved by reducing the interest rate that also lowers your payments. In debt settlement, the total amount you owe to your creditors is reduced by more than half.

Don’t allow your debts to assume a proportion in which you are left with bankruptcy as the only debt relief option. Filing bankruptcy has many negative effects and stays in your credit report for a period of 7 to 10 years.

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