New Personal Bankruptcy Law Change Requires Consumer Credit Counseling Before Filing
Consumer Credit Counseling now required by new Bankruptcy Law
With the change in the new bankruptcy law effective October 2005, it is now necessary for consumers to get credit counseling within the six months before filing bankruptcy.
The credit counseling service must be from a government approved credit and debt counseling organization. A list of approved credit counseling organizations for your state can be found at: http://www.usdoj.gov/ust/eo/bapcpa/ccde/cc_approved.htm
Your credit counseling requirement can be satisfied in person, on the phone or online on the Internet. The session can be expected to last about 90 minutes. Upon completion of the session you must obtain a certificate of proof that you participated in the credit counseling session. The certificate will be submitted to the bankruptcy court with your bankruptcy filing.
Your credit counseling session will generally cost about $50. However, charges may vary from provider to provider. Free credit counseling may be available if you cannot afford to pay for it. There may also be a charge for the certificate showing that you completed the required credit counseling.
Some credit counseling organizations may recommend that you enter into a “debt management plan” (DMP) to pay off your creditors in lieu to avoid bankruptcy. It is not required under bankruptcy law that you submit to a DMP prior to filing for bankruptcy. Entering a debt management plan is voluntary and should be evaluated carefully before you make a decision.
For more comsumer bankruptcy law information please click here.
