New Laws Make Bankruptcy Credit Counseling Mandatory
The new bankruptcy law which is effective from 2005 requires debtors to undergo bankruptcy credit counseling 180 days prior to actually filing for bankruptcy. And such a service facility has to be necessarily approved by the bankruptcy court according to the United States “Bankruptcy Abuse Prevention and Consumer Protection Act” of 2005.
Under the requirements of the new bankruptcy laws of 2005, debtors are required to undergo bankruptcy credit counseling sessions at least 180 days before they file for bankruptcy. While the agency which provides counseling facilities needs to be necessarily approved by the bankruptcy court, debtors could even fulfill the requirement by using internet facilities to their advantage. Alternatively, a probable bankruptcy filer could also obtain credit counseling over telephone or through individual or group credit counseling at some specific agencies which have been okayed by the court. Typically, as per the new bankruptcy rules and regulations, the bankruptcy Trustee is authorized to approve bankruptcy credit counselors.
The above mentioned only necessitates the urge for proper bankruptcy legal advice since the entire process could be a subtle one. This is because the “Trustee” appointed by the bankruptcy court is most likely to grant an approval for an agency that works with a nonprofit motto. According to new law, it is mandatory for debtors to receive an instructional course which offers vital education on management of personal finances 180 days prior to filing a bankruptcy petition. Remember, the law has stringent requirements for such credit counseling agencies as well, the foremost being it should have a nonprofit budget. Competent bankruptcy lawyers who are well versed with all these process requirements could be the best guides.
Besides, filing chapter 7 personal bankruptcies these days is not that easy. The existing US federal bankruptcy laws have imposed certain restrictions on debtors as regards to the qualification criteria for complete discharge for debts. Under the new rules, debtors who have higher monthly incomes may not be eligible for chapter 7 bankruptcy at all. The process has been criticized by legal experts particularly because it seeks to delay legal protection for debtors during which creditors can recover some of the credit dues which the debtor may owe. But when you have an attorney by your side, you could have the much desired shield to protect yourself from your multiple creditors.
As the new bankruptcy laws have allowed usage of credit counseling facilities over telephone, it has emerged as the most popular method among both lawyers as well as debtors. The entire process could get over within one hour and as per law, no credit counseling firm can charge more than $ 50 for the services provided. And after the credit counseling sessions are completed, a debtor is entitled to receive a certificate from the credit counseling agency. This certificate has to be presented to the court at the time of filing a bankruptcy petition. That is what makes it important.
To know more about Credit Card bankruptcy, it is hereby recommended to utilize the professional services for Chapter 13 Bankruptcy Rules and chapter 7 bankruptcy offered by reputed online service providers like BankruptcyOnly.
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