Is bankruptcy counseling required by law?

Before filing for bankruptcy most applicants must now undergo credit counseling in a government-approved program. The purpose of this counseling is to give you an idea of whether you really need to file for bankruptcy or whether an informal repayment plan would get you back on your economic feet.

After the conclusion of bankruptcy proceedings, but before any debt can be discharged, bankruptcy filers must participate in a government-approved financial management education program. It’s mandatory. Counseling is required even if it's obvious that a repayment plan isn't feasible or you are facing debts that you find unfair and don't want to pay. You are required only to participate, not to go along with any repayment plan the agency proposes.

If the program comes up with a repayment plan, you will have to submit it to the court, along with a certificate showing that you completed the counseling, before you can file for bankruptcy. Once your bankruptcy case is over, you'll have to attend another counseling session, this time to learn personal financial management.