In 2005, Congress passed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA). BAPCPA was designed to discourage Chapter 7 filings and encourage people to file Chapter 13 reorganization of debts.
One key change in the new bankruptcy law is a provision requiring consumers to get professional debt counseling to avoid similar financial troubles in the future. This requirement is not a big deal, and should not deter you from filing for bankruptcy.
Before you can actually file for bankruptcy, you must consult with an approved debt counseling agency to discuss debt relief alternatives (e.g., negotiating debts with creditors, obtaining a second mortgage or consolidating or refinancing debts, etc.). This step involves a minor time commitment; it can often be done over the Internet. No matter what advice you receive from the credit counselor, you still have the legal right to file for bankruptcy.
Shortly after you file for bankruptcy, you must take a debtor education course, known as the personal financial management course. The purpose of this debt counseling education is to learn how to create and stick to a realistic budget so that you do not repeat the pattern that led to your current financial situation.
Your bankruptcy will not be discharged until you complete the course. As a matter of fact, if you fail to complete this course your case will be closed without a discharge. If you retain me as your bankruptcy lawyer, we can help steer you to an approved credit counseling agency, including non-profit
agencies. The course can be completed on your own schedule and often can be done over the Internet.
Listed below is the name of one credit reporting agency that can help you with your credit counseling requirements:
Call our office today for instructions and for special codes to use when registering for credit counseling. This information will be given to you at the time of your retainer with the firm.
We are a debt relief agency. We help people file for bankruptcy relief under the Federal Bankruptcy Code.
