Bankruptcy 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.

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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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