One of the additions to the Law made by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 is the requirement known as Consumer Credit Counseling. The debtor must complete Credit Counseling within the 180 days before the date that their Bankruptcy Petition will be filed.
- What is Consumer Credit Counseling?
It is an approximately 1-1.5 hour course that can be done either online or via the telephone
- Do I have to pay for Credit Counseling?
Credit Counseling does cost money. The amount depends on which provider you use. It costs more to do the course by phone then it does to do it online. Some providers cost far less than others, but they require more steps and take longer to issue the required certificate. It is helpful to ask your Attorney about who they recommend as they will typically steer you towards who has the best prices and service.
- What do I need to provide when I take this course?
You will be asked about your monthly income, your monthly expenses, and about your debts. It is helpful, though not required, to have your pay stubs, credit report, and or bills on hand, but it is also okay to just estimate, there is no pass or fail.
Once you have completed entering all of your information, you will likely be asked to call and speak to a Credit Counselor by phone. Depending on the provider you chose to use, they may try to talk you into signing up for their debt management program, where they offer to negotiate with your creditors to decrease your debts and put you on some kind of payment plan. You are NOT required to do this. You let them know that you just want your certificate of completion and provide the contact info where you want it sent. The Certificate of Completion is what is actually filed along with your Bankruptcy Petition.
- How do I find a Credit Counseling Provider?
An experienced Bankruptcy Attorney’s office will also have Paralegals and other Professionals who can point you in the right direction. Our office makes referrals based on cost, customer service and past experience.
- When should I complete the Credit Counseling?
Keep in mind that the certificates are good for only 180 days. If you are on a long payment plan with an attorney, you haven’t fully committed to filing bankruptcy, or any other reason that could delay the filing process for more than a couple months, it is best to hold off. But if you are anxious to file and have retained an attorney, it is best to get that part out of the way so it doesn’t delay your filing in any way.
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