Articles -
Credit Counseling Under The New
Bankruptcy Law
Bankruptcy credit counseling is a requirement of the new bankruptcy
law effective October 17, 2005. The Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 requires court approved bankruptcy
credit counseling to be completed by debtors prior to filing for
bankruptcy within the 180 days immediately preceding the filing of a
bankruptcy petition.
The new requirement for bankruptcy credit counseling prior to filing
for bankruptcy may be completed by internet credit counseling, phone
credit counseling, or group or individual credit counseling at specific,
court approved bankruptcy credit counseling agencies. Under the new
bankruptcy law, the U. S. Trustee's Office is responsible for approving
bankruptcy credit counselors. The U. S. Trustee's Office may approve a
nonprofit budget and credit counseling agency or an instructional course
concerning personal financial management if the nonprofit budget and
credit counseling agency meets certain stringent requirements set forth
in the law.
The new bankruptcy law has made filing bankruptcy more difficult than
ever before. The new bankruptcy law was fueled by credit card companies
and their high powered lobbyist who wanted to make it harder for debtors
to wipe out credit card debt. Bankruptcy credit counseling has been seen
by many bankruptcy attorneys as an attempt to delay a debtor from
seeking protection in the bankruptcy court. The delay may be just enough
time for a creditor to obtain a judgment or collect garnishment funds.
Most bankruptcy lawyers are finding out that the telephonic method of
counseling is the easiest for debtors to complete in a hurry. Most
telephonic counseling can be completed in about 1 hour.
The maximum amount any bankruptcy credit counseling agency can charge
for counseling is set by law. No bankruptcy credit counseling agency can
charge more than $50.00 for the credit counseling. Once bankruptcy
credit counseling sessions have been completed, debtors are given a
certificate of completion from the credit counseling agency to be filed
with the bankruptcy court upon filing of the debtor's bankruptcy
petition.
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