Bankruptcy is a legal process that is designed to help someone in an unfortunate financial situation rehabilitate themselves, get a fresh start and get back to contributing to society. Therefore, when you file for personal bankruptcy or make an assignment into bankruptcy, the court requires you to complete certain duties and responsibilities during the 9 months that you are bankrupt, in order for to get relief from your debt.
One of the duties is to attend two counselling sessions. The two counselling sessions need to be done within a certain amount of time after you file for bankruptcy, and are even required when you do a consumer proposal. When I meet with clients they are often intimidated by the idea of having to do the counselling sessions and want to know if they are mandatory. While they are mandatory, there is no reason to be nervous – most people tell me how useful the sessions were once they have completed them.
Just so you can have a brief idea of what each session is about, I have outlined them as follows:
Each session is about an hour long and can be done in a group setting or individually. At Hoyes, Michalos & Associates Inc., we want you to get the most out of the sessions, so our sessions are done on an individual basis. Couples who file together attend the sessions together as this makes the most sense.
The first session will deal with budgeting, which a lot of people find helpful. Depending on how you are paid and the expenses you have, there are various ways to make the budgeting process work. The idea is to help you with your particular budgeting issues so that you do not get into new or more debt.
This session coincides with another duty required when you file for bankruptcy – monthly income and expense statements submitted to your trustee for the time that you are bankrupt. By learning how to budget, your monthly statements are easier to complete, and in the future you’ll be able to take control of and keep control over your spending.
The second session deals with the factors that contributed to your debts and the resulting bankruptcy. Things like job loss are discussed and you are taught how to plan for such an event. Although most of us don’t want to think about losing our job, it does happen in today’s economy and you need to think about how it will impact your finances and plan to the extent that you can to prepare for it. People I meet with usually know how they got into debt and this session will give you some tools on how to deal with the life events such as a job loss or illness in the family that sparked your financial situation. The one on one with the counsellor for this session ensures that your specific situation is discussed, so that you not only relate to the material, but also that you can safeguard your future from any more financial trouble.
Don’t be intimidated by the required counselling sessions. Embrace them as an opportunity to get a fresh start and you may actually find what you learn useful.
If you find that you are struggling with your debts and are having difficulty budgeting, please contact us at 310-PLAN and speak to one of our professional staff. We would be happy to meet with you to discuss your options and come up with a plan that will work for you.
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