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Pre-bankruptcy counseling is mandatory in Illinois

Illinoisans find themselves under financial stress for a lot of reasons. Some suffer from medical debt; others are besieged with credit card debt. Whatever the reason for their debt, Illinoisans feeling squeezed may want to consider an option that could provide relief: bankruptcy.

For those Illinoisans who choose to file for bankruptcy, the first step is to get pre-bankruptcy counseling. This counseling is mandatory. Providing a certificate of completion is a required part of a person's bankruptcy application.

But not all forms of credit counseling count. To satisfy the bankruptcy rules, a person must receive credit counseling from a counselor approved by the Department of Justice's U.S. Trustee Program.

To enforce this requirement, only approved counselors can give out certificates of completion. Each of these certificates is individually numbered and created by an automated, centralized system.

Counseling sessions are short, normally 60-to-90 minutes. During that time, the counselor will do a financial assessment, discuss budgeting and raise bankruptcy alternatives. These sessions can be in person, over the phone or even online.

These sessions generally cost around $50. But if that amount is too much, a fee waiver is possible.

But, as with anything, not all counselors are created equal. Some do a better job, and some provide more information. As a result, Illinoisans will want to do their homework before selecting a counselor. That homework should include researching the counselor's credentials, offered services, fees and the like.

To learn more about pre-bankruptcy counseling and the many other steps along the way to a fresh financial slate, Illinoisans may benefit from speaking about their situation with an experienced bankruptcy attorney.

Source: Federal Trade Commission, "Filing for Bankruptcy: What to Know," Accessed Dec. 13, 2016

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