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What Happens During a Pre-filing Credit Counseling Session?

When you file for bankruptcy, you are required to receive credit counseling from a qualified source. This is to help you gain insight about how debt and credit work, how you got into your particular situation, and to help you develop strategies that you can use to avoid going into unmanageable debt again in the future.

If you are considering filing for Chapter 7 or Chapter 13 bankruptcy, you might be wondering what to expect from your pre-filing credit counseling session. The thought of having to sit down with a professional and discuss personal details of your financial life can be stressful, but remember, it is ultimately to help you come out of your bankruptcy stronger and ready to manage your finances in a healthy, productive way.

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Bankruptcy and Student Debt: What You Should Know

Student debt is an issue that plagues hundreds of thousands of Americans. It is an issue most commonly associated with Millennials, adults who are currently in their 20s and early 30s, because of how the cost of college rose exponentially during the past decade amid a sluggish economy and stagnant wages. Young adults across the nation have delayed many of the traditional markers of adulthood, such as moving out of their parents' homes, getting married, and starting families of their own because of the levels of student debt they face.

One persistent myth about student debt is that it cannot be discharged in bankruptcy. Although this is true in many cases, it is often touted as a fact without exception. But the truth is, there are certain circumstances in which an individual can discharge his or her student debt through bankruptcy. Generally, if you can prove that you cannot live without undue hardship without discharging your student debt, you can have it discharged as part of a Chapter 7 or Chapter 13 bankruptcy plan.

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Can I Get a Credit Card After Bankruptcy?

If you are currently going through the bankruptcy process or have recently completed it, you are probably hearing and reading advice from many different sources. The advice you receive might be contradictory or inconsistent, with some parties advocating strategies that would not work in your situation or seem like they would get you back into debt, rather than help you stay out of it. One piece of advice you have undoubtedly received is to take steps to rebuild your credit. But how? After bankruptcy, your credit score is severely damaged and will remain that way for years, possibly up to a decade.

You can start by getting another credit card. This might seem impossible, but it is actually a fairly simple, straightforward solution. Secured credit cards, credit cards that are backed by a collateral cash amount that you give to the bank to open the card, are a great option for rebuilding a damaged credit score. But they are not the only option. For many individuals, it is possible to get another unsecured credit card to start rebuilding credit again.

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Reasons Why a Bankruptcy Claim May Be Denied

When you file for bankruptcy, your claim is not automatically approved. It is possible for the court to deny your claim, putting you in a position in which you continue to face difficulty managing your debt and are subject to collection attempts from your creditor. Why would the court do this? There are a few reasons why a bankruptcy claim may be denied, which are discussed below. For further information and guidance through your bankruptcy case, work with an experienced bankruptcy attorney who can act as an advocate for your rights and interests.

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Four Things Not to Do Before You File for Bankruptcy

In an earlier blog post, we discussed the steps you should take before you file for bankruptcy. If you are at the point where your personal debt has become so unmanageable that you are considering bankruptcy, there are ways that you can either seriously hurt or help your financial situation before you file your bankruptcy with the court. Some of these things you can do are specific to your situation and can be explained to you in detail by a financial advisor or an experienced bankruptcy attorney. For most people, avoiding the following actions in the weeks, months, and days leading up to filing for bankruptcy can make the process much easier.

Do Not Move Your Assets

Your assets, which can include physical possessions like cars and recreational items, and your financial assets, like your bank accounts and investments, are used to determine your net worth. When you file for bankruptcy, the court assesses your net worth and your disposable income level to determine a realistic debt repayment plan for you. Moving your assets in an attempt to “protect” them from the court can result in your discharge being revoked.

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