If you meet with a bankruptcy lawyer and decide to file for bankruptcy, the lawyer will tell you that you must take a credit counseling course before he or she can file your bankruptcy documents with the court. This course is required for several key reasons, and here are three of them.

To learn more about the alternatives to bankruptcy

Bankruptcy law requires that everyone take two credit counseling courses when filing for bankruptcy, and the first course is required before the person files the paperwork for the bankruptcy. The purpose of the course is to give a person a way out of using bankruptcy, as it can have negative effects on your credit, and it could help you see another way out of debt without the use of bankruptcy. The course will tell you about each of the major alternatives to bankruptcy, simply so that you do not feel like bankruptcy is the only option you have. If you find another option that will work better for you, you could back out of the bankruptcy and use that option instead.

To educate you about the pitfalls of bankruptcy

Secondly, the course will teach you about the pitfalls, or downsides, of choosing bankruptcy, and it is important to fully understand these things before you file. The main downside you will experience involves the effects on your credit report. Filing for Chapter 7 is an event that does not simply disappear right away. Instead, it will remain on your file for 10 years, and you should be aware of this before you go through with filing for it.

To teach you about money management

Finally, taking a credit counseling course is required to help you learn how to prevent financial problems in the future. Through the courses you take, you will learn how to create a budget and live by it. You will also learn how to reduce your monthly expenses and how to manage your credit lines more effectively and wisely. Additionally, you will learn how to develop a new lifestyle that involves living within your means. Applying the things you learn could help you avoid falling into the debt trap in the future.

As you take this required course, you should pay close attention to the information you learn, as it can be helpful for you in your decision about bankruptcy and with the way you manage money in the future. Talk to a bankruptcy lawyer if you have questions about this.