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What should I expect in my pre-bankruptcy counseling session?

Before filing for bankruptcy, Tennessee residents must attend counseling. This counseling is mandatory because it allows a credit counselor to assess a person's situation and see if bankruptcy is the right option. Plus, it makes sure that the person understands the ramifications of bankruptcy and will work to prevent it from happening again.

You must receive counseling from an approved program. The program must include various elements, including a review of your financial situation. The counselor should also help you create a budget based on your specific situation and discuss alternatives to bankruptcy, if any.

The sessions are about an hour long and cost $50. The session does not necessarily have to be completed in person. The counseling may be done via the phone or online, if it is more convenient. If you can't afford the fee, the organization can choose to waive it. Once the session is complete, you will receive a certificate that serves as proof that you attended counseling and met the bankruptcy requirement.

It's important to choose an approved counseling organization, because if you don't, it won't count toward your bankruptcy requirement. Do your homework and find a counselor who has the training and knowledge to truly help you with your finances. You should also find a reputable organization that will keep your personal information safe.

A credit counselor should be working in your best interests and not solely out to make money off of your situation. If you have questions or concerns about the bankruptcy process, be sure to discuss them with a bankruptcy attorney who can steer you in the right direction.

Source: FindLaw, "Bankruptcy: Counseling Before Filing," accessed Feb. 8, 2015

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