If a consumer is overloaded with unsecured debt and unable to pay that amount off in a reasonable payment plan over the next five years, bankruptcy may be the best option available. When consumer debt overload spirals that far out of control, the truth is that strong and forceful measures must be taken for the sake of survival. A Chapter 7 bankruptcy will wipe out all unsecured consumer debt within a few months and allow for the individual or family to get a true fresh start. Arkansas residents will file the case here but the U.S. Bankruptcy Code will apply to processing and resolution of the matter.
If the individual or married couple are qualified under means testing to file a consumer bankruptcy under federal law, then the case may be filed. To do this in the strongest and most informed manner possible, it is recommended that the consumer filers consult with and retain the services of an experienced bankruptcy attorney. There will be various requirements to follow and numerous legal rules come into play which require the input of a professional representative.
Prior to the filing, consumer debtors must each take a course in consumer debt management and must submit the certificate of counseling with the initial bankruptcy petition. The course may be taken online and is generally a preparatory lesson describing the workings of bankruptcy and the benefits and detriments that it may pose. It seeks to help the consumer determine whether bankruptcy is the best way to succeed, which is why the course must be taken before the bankruptcy petition is filed.
There is also a course that is taken prior to the close of the bankruptcy case. This is generally called a course in financial education and management. It helps to learn how to set up the budget and manage finances in the future. It will contain some of the same material as in the pre-bankruptcy course, but this course will also focus on increasing the consumer's financial literacy. The certificate requirements apply in Arkansas and all other jurisdictions.
Source: nerdwallet.com, "Bankruptcy Counseling: What It Is, What to Expect", Sean Pyles, May 18. 2016