Each year, many New Mexico residents who find themselves bogged down with debt choose to file for bankruptcy. If you are struggling to pay back what you owe, you might consider going this route. You will first have to receive a bankruptcy certificate, which plays an important role.
The bankruptcy certificate explained
When you plan on filing for bankruptcy, you must satisfy certain prerequisites. This include credit counseling and a course on the best ways to manage your debt. Once you have completed those two priorities, you receive a bankruptcy certificate. The certificate tells your creditors that you have taken the course and have undergone credit counseling and your bankruptcy case can then move forward.
How bankruptcy certificates work
To obtain a bankruptcy certificate, you must complete the credit counseling and debt educational course through a credit counseling company approved by the United States Trustee Program. It’s important to keep this in mind when seeking a credit counseling company to satisfy those prerequisites as you cannot get the certificate from those that are not approved.
Credit counseling pairs you with a counselor who reviews your financial documents to see whether bankruptcy is the right step for you. When you complete your session, which lasts around 60 to 90 minutes, you will get a bankruptcy certificate that is valid for 180 days. This certificate must be included in your petition for bankruptcy if you choose to proceed that way.
There are fees associated with credit counseling. These must be revealed to you upfront, but on average, the fee is usually $50.
The debt educational course, which lasts around two hours, teaches you about better ways to manage your money and how to create a budget that works for you. When you complete the course, you will also receive a certificate that is required to be filed with the bankruptcy court so that your debts can be discharged.
The course can be done online, over the phone or in person. Associated fees usually range from around $50 to $100.