California residents who are in debt with no foreseeable way to pay it back or in a timely manner might want to file for bankruptcy. It’s important to know what a bankruptcy certificate is and its purpose.
What is a bankruptcy certificate?
A bankruptcy certificate is a document you receive that states that you have successfully completed credit counseling and an educational course on managing debt. Credit counseling and debt management educational courses are required when you plan on filing for bankruptcy. Only after you receive the certificate is it possible to proceed with the bankruptcy case.
Only certain agencies are permitted to issue bankruptcy certificates to consumers. This means that you should only receive credit counseling from companies approved by the U.S. Trustee Program as only those are the only ones authorized to issue a bankruptcy certificate.
After you have completed credit counseling and receive a bankruptcy certificate, you enroll in a debt education course. Once you complete that, you will receive another bankruptcy certificate that proves you meet the requirements to file for bankruptcy.
How does a bankruptcy certificate work?
When you have chosen bankruptcy as the route you wish to go to alleviate your debt, you will meet with a credit counselor to see whether bankruptcy is, indeed, the best option. The credit counselor will review all of your financial documents to assess your debt and the reasons behind it. After completing the counseling, you are given a bankruptcy certificate that’s good for 180 days. The certificate is included in your bankruptcy petition.
The debtor education course is to teach you how to better manage your finances. Once you have completed the course, you receive a second bankruptcy certificate that must be filed with the bankruptcy court.