A debtor considering bankruptcy must bear in mind that a bankruptcy stays on his or her credit report for up to 10 years, which can potentially make it difficult to get future credit. A debtor should also keep in mind that some debts must still be paid even if he or she files for bankruptcy. Accordingly, it is essential to contact an experienced bankruptcy attorney before making potentially life-altering financial decisions.
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If you are struggling with high debt, bankruptcy can be an effective means of getting that burden off your shoulders. At the Law Office of Mark A. Skelton, we help people get out of debt and stop harsh creditor actions by assisting them in filing for Chapter 7 and Chapter 13 bankruptcy relief. We serve clients from throughout the East Tennessee region. We offer excellent client service and personal, hands-on attention from a highly qualified bankruptcy attorney.
To learn more about bankruptcy, please review the information provided below or visit our bankruptcy practice area page.
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Are you getting tired of creditor harassment? Are you being threatened with wage garnishment, foreclosure, repossession and other actions? Bankruptcy can put all of that to an end.
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Credit Counseling Requirement in Bankruptcy
In 2005, Congress passed and President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a bankruptcy reform law. One of the new requirements BAPCPA imposes on a bankruptcy debtor is to receive credit counseling from an approved credit counseling agency before the bankruptcy filing. A bankruptcy lawyer experienced in consumer credit law at Mark Albert Skelton, Attorney at Law in Rogersville, Tennessee, can help debtors determine whether bankruptcy is the appropriate course of action for them and can advise them about the credit counseling requirements.
Specifically, the BAPCPA requires that a debtor must receive an "individual or group briefing" from a nonprofit budget and credit counseling agency within 180 days before filing for bankruptcy. The briefing can be in person, by telephone or via the Internet, but it must "[outline] the opportunities for available credit counseling and [assist] such individual in performing a related budget analysis." If a debt management plan is developed in the course of the required counseling, it must be filed with the bankruptcy court once the bankruptcy proceeding has begun.
Approved credit counseling agencies
In most states, the U.S. trustee maintains a list of approved credit counseling agencies for use in the court districts in those states. In Alabama and North Carolina, this list is approved by bankruptcy administrators instead of trustees. The list of approved agencies is available on the U.S. courts website. Approval can be revoked at any time, and interested persons can ask the court to review the approval of any agency.
To obtain approval, an agency must:
- Have qualified, experienced counselors who provide adequate counseling and have no financial interest in the counseling outcome
- Handle client funds securely
- Maintain an independent board of directors
- Charge reasonable and sliding scale fees
- Make certain disclosures
- Possess financial security to oversee repayment plans of clients
- Maintain "quality, effectiveness, and financial security of the services it provides"
Exceptions to the credit counseling requirement
There are some exceptions to the counseling requirement for certain debtors in particular situations. First, the court may waive the counseling requirement if there are "exigent circumstances" and the debtor made a request for counseling that an agency was unable to provide within five days. Second, a debtor is excused from the requirement if incapacitated by mental illness or deficiency, if physically impaired such that he or she is unable to participate with reasonable effort, or if on active military duty in a combat zone. Third, counseling is not required if the trustee or administrator in a particular court district determines there are not enough approved credit counseling agencies available.
Speak to a bankruptcy lawyer
Consumers considering bankruptcy as a future option should investigate the credit counseling requirement well before the anticipated bankruptcy filing. The experienced consumer and bankruptcy law attorneys at Mark Albert Skelton, Attorney at Law in Rogersville, Tennessee, can provide much-needed information about credit counseling and bankruptcy filings.
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