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Credit Counseling

The bankruptcy code constantly changes. In 2005, a significant change was made with the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act, or BAPCPA. Among other requirements, one that was added was the requirement that debtors filing for consumer bankruptcies must complete an approved credit counseling course prior to filing their bankruptcy petitions.

The briefing requirement

Under the act, debtors have to receive what is called an individual or group briefing. This briefing must be provided by an approved nonprofit credit and budget counseling agency within the 180-day period that precedes the filing date. People are able to complete this briefing over the internet, by telephone or in person. The briefing must provide all of the options for credit counseling while helping the debtor to complete an analysis of his or her budget. If the person ends up developing a debt management plan through the counseling session, that plan must be filed with the court.

Approved agencies

In a majority of the states, the United States trustee maintains a list of approved counseling agencies. The list may also be obtained online. Agencies are initially listed for a six-month period during which they are on probation. Following that, the agency approvals may be renewed annually, and the approvals may be revoked at any time.

There are several criteria that an agency must meet in order to be approved for credit counseling services, including the following:

● Have experienced and qualified counselors who are able to provide adequate counseling
● The counselors must not have any financial interests in the outcome of the counseling sessions
● Client funds must be handled securely
● The agency must have an independent board of directors
● The fees must be reasonable, and sliding scale fees must be offered
● The agency must be able to securely oversee the clients’ repayment plans

New Jersey’s List Of Approved Credit Counceling Agencies

New York’s List Of Approved Credit Counceling Agencies

Pennsylvania’s List Of Approved Credit Counceling Agencies

Exceptions to the requirement for mandatory counseling

Under some specific circumstances, the counseling requirement may be waived. This can occur when the debtor is mentally incapacitated, when he or she is physically impaired to such a degree that participation would be difficult or if the debtor is deployed to a combat zone on active duty. Courts sometimes will also waive the requirement if exigent circumstances exist, and the debtor asked for counseling that the agency couldn’t complete within five days of the request. The final exception is when legal officials have determined that there are no available approved agencies.

Contact Our Bankruptcy Attorneys

If you are thinking about filing for bankruptcy, you will need to complete your counseling before you file. Contact our bankruptcy attorneys today to learn more about bankruptcy and the counseling requirement.