The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 launched a new era: With limited exceptions, people who plan to file for bankruptcy protection must get creditcounseling from a government-approved organization within 180 days before they file. They also must complete a debtoreducation course to have their debts discharged.
The Department of Justice's U.S. Trustee Program approves organizations to provide the mandatory creditcounseling and debtoreducation. Only the counselors and educators that appear on the U.S. Trustee Program's lists can advertise that they are, indeed, approved to provide the required counseling and debtoreducation. By law, the U.S. Trustee Program does not operate in Alabama and North Carolina; in these states, court officials called Bankruptcy Administrators approve pre-bankruptcycreditcounselingorganizations and pre-discharge debtoreducation course providers.
Counseling and Education Requirements
As a rule, pre-bankruptcycreditcounseling and pre-discharge debtoreducation may not be provided at the same time. Credit counseling must take place before you file for bankruptcy; debtoreducation must take place after you file.
In general, you must file a certificate of creditcounseling completion when you file for bankruptcy and evidence of completion of debtoreducation after you file for bankruptcy - but before your debts are discharged. Only creditcounselingorganizations and debtoreducation course providers that have been approved by the U.S. Trustee Program may issue these certificates. To protect against fraud, the certificates are produced through a central automated system and are numbered.
Pre-bankruptcy Counseling
A pre-bankruptcycounseling session with an approved creditcounselingorganization should include an evaluation of your personal financial situation, a discussion of alternatives to bankruptcy, and a personal budget plan. A typical counseling session should last about 60 to 90 minutes, and can take place in person, on the phone, or online.
The counselingorganization is required to provide the counseling free of charge for those consumers who cannot afford to pay. If you cannot afford to pay a fee for creditcounseling, you should request a fee waiver from the counselingorganization before the session begins. Otherwise, you may be charged a fee for the counseling, which will generally be about $50, depending on where you live, the types of services you receive, and other factors. The counselingorganization is required to discuss any fees with you before starting the counseling session.
Once you have completed the required counseling, you must get a certificate as proof. Check the U.S. Trustee's website to be sure that you receive the certificate from a counselingorganization that is approved in the judicial district where you are filing bankruptcy. Credit counselingorganizations may not charge an extra fee for the certificate.
".....
Once you have completed the required counseling, you must get a certificate as proof....."
![[Valid RSS feed]](http://www.searchnfindarticles.com/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites