Bankruptcy FAQ

Here’s a look at the most frequently asked questions about the bankruptcy process, counseling requirements, and our particular counseling services: pre-bankruptcy credit counseling and pre-discharge debtor education.

Questions about the Bankruptcy Process and Requirements

1. Does the law require that I receive bankruptcy counseling?

Yes, according to the Bankruptcy Abuse and Prevention and Consumer Protection Act of 2005 (BAPCPA).

2. If so, what type of counseling do I need to fulfill these requirements?

BAPCPA requires both a Bankruptcy Pre-Filing Counseling session and a Bankruptcy Pre-Discharge Education course, so there is one counseling session and one education session.

3. My spouse and I are filing  jointly, do we both have to take the classes at the same time?

Couples are not required to take the sessions together; however, all parties needing a certificate must attend a counseling session and an education course. In our program, couples can complete the pre-bankruptcy credit counseling together, at the same screen and using the same login information. In our pre-discharge debtor education, however, each individual must study the material and complete the test separately, using a different account than their partner.

4. How quickly can I get through my entire bankruptcy?

It depends on the chapter being filed. Chapter 7s can take anywhere from three to six months from the time the petition is submitted to the court to the completed discharge. A Chapter 13 can take anywhere from three to five years.

5. Chapter 7 or Chapter 13 bankruptcy–what’s the difference?

A Chapter 7 involves the liquidation of a debtor’s unsecured debt. A Chapter 13 is a structured repayment plan through the court and trustee.

6. How do bankruptcy and a debt management program differ?

A debt management program (DMP) is a voluntary repayment plan established outside of the court system and is typically administered by a nonprofit credit counseling agency. Bankruptcy is a legal proceeding asserting your legal right to negotiate with your creditors to have your debt liquidated or restructured for repayment.

7. How does bankruptcy affect credit? What about a DMP?

In a bankruptcy, a public record is created which will remain on your credit report for up to 10 years. In a DMP, creditors report your accounts differently, and can sometimes add notes that you are working with a credit counseling agency (this does not impact your credit score). A DMP also often requires you to close your accounts and avoid new credit. However, based on one study within our organization, DMP clients on average increase their credit scores by 106 points within three years of starting the program.

8. How many years will bankruptcy remain on my credit report?

A Chapter 7 bankruptcy remains on the credit report for 10 years. Non-discharged Chapter 13 bankruptcies may also remain for 10 years, but usually Chapter 13s remain for seven years.

9. How much will it cost for me to file bankruptcy?

Attorney fees can vary substantially depending on the case and service delivery. Attorney fees should generally be in the range of $1,000-$2,000. There are also court filing costs:

  • Chapter 7 court filing costs are approximately $299.
  • Chapter 13 court filing costs are approximately $274.

10. How do I file for bankruptcy?

The simplest way to get started is to obtain your pre-bankruptcy credit counseling certificate and then contact an attorney.

11. I don’t understand the idea of a “Means Test.” What is it?

The Means Test is a qualifier administered by the attorney to determine if a consumer qualifies for a Chapter 7 filing, or has the means (or ability) to repay a portion of the debt owed through a Chapter 13 filing.

12. What do I do if I don’t even have the funds to hire an attorney?

Clearpoint strongly encourages clients to utilize the professional services of a qualified attorney. Other options and resources may include free or low-cost legal services or assistance through Legal Aid clinics, the Legal Aid Foundation, or pro-bono work provided by your local bar association. You may also use www.lawhelp.org to help find resources near you.

13. Who will be able to see that I filed bankruptcy?

Clearpoint holds all client information in strict confidence (see our Privacy Policy). However, a bankruptcy filing does become a public record and can be looked up by anyone with the desire to do so.

14. Will Clearpoint’s bankruptcy staff help in completing my bankruptcy documentation?

Clearpoint is neither a legal advisor nor a petition preparer and cannot help in the preparation of bankruptcy forms.

Questions about Pre-bankruptcy Credit Counseling

1. Do I need to have an attorney before receiving counseling?

No, this is not required. In fact, you can’t begin your bankruptcy filing without having received your counseling certificate, so it is quite common to get an attorney after receiving the counseling.

2. What information do I need to provide?

In the session, you will provide various pieces of information about your financial situation, including details about why you are filing for bankruptcy. Here are the specifics you will need to provide:

  • Income documentation (including W-2s/paystubs, Social Security payments, alimony, and child support)
  • Information on your expenses (including your mortgage or rent payments, food, insurance, childcare, utilities, and transportation expenses). Note: your checkbook is a good resource for calculating your expenses.
  • A list of the debts you owe (including statements for credit cards, student loans, auto loans, and loans against your 401K)

For each debt, you will need to provide:

  • The amount owed
  • The interest rate
  • The monthly payment amount
  • The account number
  • Whether it is a joint account

3. Can I complete this with my spouse/partner?

Yes, you and your spouse or partner can complete this counseling together.

4. Will there be a credit inquiry?

Yes, this counseling requires a credit inquiry. This is a “soft” pull of your credit, however, and will not affect your credit score or show on any third party credit report requests. The information from your credit report will allow your counselor to provide the best advice possible, and will help us ensure that the information you provide matches what the credit bureaus have on record.

5. Is this service offered in Spanish?

Yes, this counseling is available in English and Spanish.

6. How long does the counseling take?

The counseling takes about 60 minutes, but remember that you can work at your own pace and start and stop as needed.

7. How much does this cost?

The fee for this service is typically $50 per household.

8. Does Clearpoint provide fee waivers?

We waive fees for clients whose income is less than 150% of the Federal Poverty Guidelines, as determined by the Federal Register by the U.S. Department of Health. We also waive fees for those who are receiving assistance from legal aid.

9. How do I receive a fee waiver?

You will need to apply for the fee waiver and submit a few documents to be reviewed before your approval. You will have the option to apply for the waiver after you register your account and select your counseling service. Here are the documents you will need to provide:

  • A copy of your 1040
  • Your Schedule I (prepared by your attorney) or recent Paystubs

Note: Your documents must be submitted before you can proceed with your online counseling session. You will be notified via email regarding your approval status within 24 business hours from receipt of your documentation.

10. What type of payment is accepted?

You will be given the option to pay by debit card, check-by-phone, billing code, cashier’s check, or money order.

Read more about bankruptcy pre-filing counseling »

Ready to Start Pre-Filing Counseling?

Earn your certificate in our self-paced online course.

Start Now

*Clearpoint Credit Counseling Solutions is now a division of Money Management International, Inc. (MMI). You will now be transferred to MMI’s online site to begin your session. Pre-Bankruptcy is Course 1: Before Filing.

Questions about Pre-discharge Debtor Education

1. What information do I need to provide?

When registering, you will need your Social Security number, your bankruptcy case number, and your attorney firm code (if applicable).

2. Can I complete this with my spouse/partner?

If you are seeking education for yourself and your spouse or partner, you each must take the course individually with separate site logins.Whoever logs in first will be asked to submit the Social Security number of their spouse, which ensures that your household only pays once for the service.

3. Is this course offered in Spanish?

Yes, this course is available in English and Spanish.

4. How long does the counseling take to complete?

The EOUST requires that consumers spend at least 120 minutes studying this material, so you should plan to take a minimum of two hours.

5. How much does this cost?

This cost for this service is typically $50 per household. Some clients receive counseling at a reduced rate or for free. To see if you qualify, read Do I qualify for a fee waiver?

6. Does Clearpoint provide fee waivers?

We waive fees for clients whose income is less than 150% of the Federal Poverty Guidelines, as determined by the Federal Register by the U.S. Department of Health. We also waive fees for those who are receiving assistance from legal aid.

7. How do I receive a fee waiver?

You will need to apply for the fee waiver and submit a few documents to be reviewed before your approval. You will have the option to apply for the waiver after you register your account and select your counseling service. Here are the documents you will need to provide:

  • A copy of your 1040
  • Your Schedule I (prepared by your attorney) or recent Paystubs

Note: Your documents must be submitted before you can proceed with your online counseling session. You will be notified via email regarding your approval status within 24 business hours from receipt of your documentation.

8. What type of payment is accepted?

You will be given the option to pay by debit card, check-by-phone, billing code, cashier’s check, or money order.

Read more about pre-discharge debtor education »

Ready to Start Pre-discharge Debtor Education?

Earn your certificate in our self-paced online course.

Start Now

*Clearpoint Credit Counseling Solutions is now a division of Money Management International, Inc. (MMI). You will now be transferred to MMI’s online site to begin your session. Pre-Discharge is Course 2: After Filing

Get Started

Earn your bankruptcy certificates in our self-paced online program.

Pre-Bankruptcy

or

Pre-Discharge