Before filing for chapter 7 or chapter 13 bankruptcy, your Tampa bankruptcy lawyer will warn you that you are required by state law to consult a credit counseling agency. The purpose of the requirement is to make people aware of all their possible solutions and walk them through the different choices.
The History and Requirements
This law went into effect on October 17, 2005 as part of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The law was passed by Congress in March of 2005 and signed by President George W. Bush in April of that same year.
The law basically requires anyone looking to qualify for bankruptcy relief to receive credit counseling from an approved agency, regardless of whether or not they have a bankruptcy lawyer. A list of these agencies can be found on the U.S. Trustees website, and participating parties must complete the required course work within 180 days of filing for bankruptcy. Upon completion of the required counseling, participants will be given a certificate of completion.
The Purpose and Costs
The purpose of credit counseling is to make sure those looking to file for bankruptcy are making the best choice for their particular situation. Many times bankruptcy is the best option, but sometimes there are other routes that would benefit a person better in the long run.
The cost of this required credit counseling is reasonable and affordable. Laws and regulations state that a counselor can charge no more than $50 for the service and cannot turn anyone away who is unable to pay. The Office of the U.S. Trustees indicates that a reasonable fee is anywhere from $0 to $50.