New bankruptcy laws took effect October 17, 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The new law requires all debtors to get credit counseling before they can file for bankruptcy.
What Are The Bankruptcy Counseling Requirements?Before applying for bankruptcy under Chapter 7 or Chapter 13, debtors must attend credit counseling from an agency approved by the U.S. Trustee's Office (to find an approved agency in your area, go to the Trustee's website, www.usdoj.gov/ust, and click "Credit Counseling and Debtor Education"). This counseling is to determine if it is really necessary to file for bankruptcy or if an informal repayment plan could help avoid filing. The counseling is a requirement that cannot be avoided. You are required to participate, but not compelled to go along with any repayment plan proposed by the agency. If the agency does come up with a repayment plan, you must submit it to the court along with the certificate of completion before you can file for bankruptcy.
There are additional counseling requirements before you can wipe out your debt. The purpose of this counseling session is to learn personal financial management. You will need to submit to the court the certification of completion for this counseling before you can get a discharge wiping out your debts. Do I Need A Bankruptcy Attorney?Filing for bankruptcy is a difficult and emotional process. A bankruptcy attorney knows the requirements of the new bankruptcy law and can help answer your questions and explore your options. |
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