The credit counseling repayment plan requirement

Having made the decision to file for Chapter 13 bankruptcy in Nashville, you are likely to remain fairly resolute with it. After all, such a decision should not be taken lightly. While bankruptcy does offer you the advantage of halting any creditor actions from being taken against you (while also allowing you to retain some of your more important personal assets, like your home), it is not without its share of challenges and difficulties. For this reason, many of those who come to see us here at Rothschild & Ausbrooks, PLLC are often discouraged when they are told that before filing for bankruptcy, they must complete credit counseling. 

Your first impression upon hearing this may be to assume that it is simply a recommendation that we make. Yet according to Section 521(b) of the U.S. Bankruptcy Code, it is indeed a requirement that all those seeking personal bankruptcy must complete. Part of this mandatory credit counseling involved creating a repayment plan to pay back your debts without bankruptcy. You may question the need for this knowing that your financial situation is not one that can be easily resolved on your own (hence the decision to seek bankruptcy protection). Yet the purpose of the proposed repayment plan is not to deter you from continuing in your bankruptcy case. 

Rather, it is required that you present a repayment plan developed by a credit counseling agency to ensure that you really do need to file and that you are not trying to abuse the privilege. It is for this reason that while presenting the repayment plan is required, you are not obligated to follow it. The court will simply review it before proceeding with your case. 

You can learn more about bankruptcy filing requirements by continuing to explore our site. 

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