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Bankruptcy Credit Counseling

Know These Counseling and Education Requirements

Know These Counseling and Education Requirements

In a pejorative sense, one may say that all one must do to qualify for a credit counseling service or debtor education course would be to find oneself suffocated by debt. Really, though, the prerequisite of insolvency is a given, and in truth there are specific rules and regulations when it comes to selecting one versus the other, and when either one must be taken in relation to the progression of an individual’s case through the court system.
There are times when a credit counseling service is more appropriate than a debtor education course and vice-versa. On the other hand, there are ways in which the approval of these two phases of the application process are the same. The exactitude stressed in filing for bankruptcy and within bankruptcy proceedings can cause some worry and confusion, but if the basics are kept in mind, there should be no cause for alarm.
Some notes about the requirements for enrolling with a credit counseling service or debtor education course:
Timing is everything when it comes to either one of these classes. Concerning a session with a credit counseling service, this must take place before court proceedings begin. Meanwhile, a debtor education course is usually the last condition needed to be met by the debtor prior to finalization of the bankruptcy and debt discharge.
Barring an “emergency” with which the discretion of the court must acknowledge, completion of a session with a credit counseling service must take place no more than 180 days (roughly half a year) before one declares personal bankruptcy. Though the same six-month period is not specified for passing the debtor education course, in order for a discharge of debts to be realized, this absolutely must happen. After making it through both credit counseling and debtor education, a bankruptcy may be finalized.
At the risk of dismissal of one’s case, one should also make sure to hook up with the right credit counseling service or debtor education course provider, as only a suitable content provider’s certificate(s) will be deemed acceptable by the appointed authorities. The U.S. Trustee Program is instrumental in approving service providers for this purpose, so it would be wise to check its website or contact one of its representatives to see which center will be the best option for debtors. A bankruptcy clerk of court might be a good reference, as well. 

Bankruptcy Credit Counseling: Basics

Bankruptcy Credit Counseling: Basics

There are an untold number of credit counseling agencies around the United States today, and a significant number more were founded after passage of the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005. 
In its advertisements, an agency may profess to offer credit counseling services to a prospective filer, but that individual should counter by asking the representative from the organization what exactly these services are. In order to have a good working relationship with credit counseling agencies, debtors must feel as if there is mutual trust on both sides.
Certainly, part of this trust is knowing what benefits the agency will be able to afford up front, and precisely what fees will be assessed and when. If the debtor’s financial status is such that they do not have the money available for these credit counseling services, they should be able to know in writing that their fee is to be waived.
Another critical thing to assess in deciding between various credit counseling agencies is the credentials of the staff. If, upon asking what the qualifications for being a counselor in this organization are or how counselors are compensated for their credit counseling services, is met with guardedness and hostility, that might be a clear signal that this counseling agency is not for you.
Again, this is keeping with the necessity of transparency in dealing with a paid program. For all one knows, a disreputable company may be essentially paying its employees a commission for pressuring clients into choosing more expensive option.
In addition, credit counseling agencies should be assessed on the basis of what they can do to ensure the safety of your personal information you share with them. While instances of fraud and identity theft have definitely occurred in a minority of cases, that still leaves the proverbial door open for this to happen to an individual if he or she is not careful in “comparison shopping.” It is a particularly prudent measure to check which agencies and their credit counseling services in one’s district have been approved by the Office of the Trustee.   

Exceptions to Counseling Requirement

Exceptions to Counseling Requirement

For bankruptcy seekers, it is very unlikely that they will not come into contact with a credit counseling center at some point in their quest, as the amendments made to American bankruptcy law through the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 so mandate. Most likely, if people cannot make it to credit counseling centers within the 180-day window prior to filing bankruptcy in accordance with the mandatory provisions of the BAPCPA, they will be citing exigent circumstances as the reason for their inability to attend.
“Exigent circumstances,” in this context, does not refer to the same principle of police officers entering a home without a search warrant in times of emergency or great peril. Instead, these are circumstances by which urgent needs preempt the ability to visit a credit counseling center beforehand, most likely when the filing of bankruptcy is to avoid a foreclosure.
Certain handicaps—which are also uncontrollable, unforeseeable circumstances—may make the requirement to appear before a credit counseling center in the flesh unrealistic. Certainly, an individual may possess some sort of development disability or other difficulty that makes comprehension of the fundamental concepts behind credit counseling difficult if not impossible. 
In addition, military personnel who are filing for bankruptcy after previously serving in a combat area are, for good reason, not compelled to have a certificate of competing credit counseling prior to filing for bankruptcy. The sad reality is that this is applicable for so many of our servicemen and women. Unfortunately, their service to the United States does not mean they will necessarily be able to keep their heads above water, so to speak, when it comes to their finances.

Facts to Know About Credit Counseling Debtor Education

Facts to Know About Credit Counseling Debtor Education

To the tune of much controversy, credit counseling was made a compulsory condition of any individual debtor filing for bankruptcy in the United States following the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). As far as the time needed to complete counseling is concerned, in fairness, the 60 to 90 minutes that is asked of the prospective bankrupt party is a reasonably small concession.
That said, other aspects of clearing the credit counseling requirement are more problematic for someone who has not even really declared yet. For one, barring the assent of the courts to waive the fee, debtors must pay around $50 to take the class and earn the certificate that is filed with the initial petition.
Furthermore, while the session itself takes as much time as watching some movies, this does not take into account the time needed to research a quality state-approved counseling agency.

Debtor Education
Debtor education courses, such as credit counseling, are mandated for debtors in the bankruptcy filing process, and based on surface similarities, the two concepts have the tendency to be conflated. However, at their core, debtor education and counseling are two different pursuits.
The time and money requirements are not far off from one another. Usually, debtor education takes more of both, but all the same, they are not huge leaps. Whereas the time required to satisfy these conditions roughly aligns, though, the timing as regards their positions in the process are at opposite ends of the spectrum. Credit counseling is a prerequisite to filing bankruptcy, while debtor education comes after the fact, and as a condition of finalization and discharge of debts.

Counseling and Education Requirements
Discussion of “eligibility requirements” for credit counseling and debtor education may inspire fear in some applicants, but realistically, there are but a few basic premises to follow. As noted above, credit counseling must occur prior to filing for bankruptcy (within six months of filing) and debtor education must be completed at a point after formal confirmation of a plan and prior to discharge of remaining debts.
By this token, they cannot co-occur on the same day. Again, certificates from a licensed counseling agency must also be drafted and included in the act of filing at relevant times in the process. Lastly, the agency with which one works must be approved by an authority or officer of the Federal Government, such as the executive of the U.S. Trustees. 
Choosing a Counseling Agency
The top quality to look for in a credit counseling agency is not convenience, but quality itself. Such an assessment may seem too subjective to be that useful, but in faith, there are certain hallmarks of good credit counselors and agencies that transcend personal reviews. It must be stressed that a counseling agency must be approved by an extension of the Department of Justice such as the U.S. Trustee program, and thus part of the decision-making process will involve contacting a representative of a particular bureau.
Debtors should also feel that they can trust the agency and its staff should they sign a contract. This will involve things such as the open disclosure of fees and the training of the agency’s associates, as well as their respect for your privacy by keeping your personal information secure and not sharing it with any third parties.


Exceptions to Counseling Requirement
Though escaping the BAPCPA’s requirement for credit counseling is exceedingly rare, there are situations in which it simply is not possible for a credit counseling certificate to be obtained in the 180 days prior to filing bankruptcy or the five days after the fact. One broad term for events that may take precedence over a credit counseling course are known as “exigent circumstances.” In the context of bankruptcy law, these are scenarios where an immediate danger to one’s livelihood such as foreclosure provide an exception to this requirement.