A common misconception that many in Miami have about those who file for personal bankruptcy is that they are simply looking for a way to not have to pay back their debts. This line of thinking assumes that federal bankruptcy laws do not require you to seek other options. In reality, you will find that numerous other alternatives will be presented to you while you pursue your bankruptcy case. One that confuses many of those that we here at Kingcade Garcia McMaken work with as to its need is the requirement to go through credit counseling.
Per the Administrative Office of the U.S. Courts, all considering personal bankruptcy must seek credit counseling prior to filing. This may frustrate you at first, as you have likely already thoroughly assessed your financial situation and developed your own conclusions. Credit counseling agencies, however, offer both experience in helping to manage debt as well as a fresh perspective on how to settle outstanding liabilities. What they also offer that can ultimately be invaluable to you is a detailed debt repayment plan.
Federal bankruptcy law requires that you submit this proposed repayment plan as proof of you having completed the credit counseling requirement. An important point to remember is that you are not legally obligated to follow it. However, it should not simply be dismissed out of hand. If you are able to adhere to it and settle your debts, you could potentially avoid some of the negative aspects of bankruptcy (such as having it impact your credit report or forfeiting personal assets). Plus, you may find that your creditors will be willing to work with if you can show them that you have an established plan in place.
More information on finding ways to avoid bankruptcy can be found here on our site.