A graduate of Anna Maria College and Massachusetts School of Law, Holly H. Hines is a noted bankruptcy attorney serving consumers in the Worcester County area. Thanks to her extensive knowledge on the topic of bankruptcy law, Hines was able to share with us the basic information everyone should know about whether they should go through credit counseling before filing for bankruptcy.
Credit counseling is definitely a requirement for anyone considering filing for bankruptcy now, even though this was not always the case in year’s past.
The laws regarding bankruptcy filings changed in 2005 with the implementation of the Bankruptcy Prevention and Consumer Protection Act, however, and part of the new law going into effect was that the courts ruled that credit counseling must be a part of any bankruptcy process for consumers.
Debtors who file bankruptcy now are required to take credit counseling as a prerequisite to making their initial filing. There is a second course called Financial Management as well, which consumers are required to take and complete after they have filed their matter with the courts. The point of the financial management course is to prevent future financial problems from arising with a person or a couple who is filing for bankruptcy.
A lot of information is available in credit counseling courses, and it is fairly easy for people to take them. The classes are available over the phone and online, so consumers do not even have to leave their homes to take the course.
Most folks, I think, are able to complete the course in less than an hour — at least the first course, the credit counseling course. As for the second course, the financial management course has a quiz at the end that people are required to complete. I believe the point of the quiz is just to reiterate the principles behind it all. That in itself, though, does tend to take people a little longer to complete sometimes. Some folks have taken up to two hours to complete the second course including the required quiz.
So, the Bankruptcy Prevention and Consumer Protection Act of 2005 mandated that anyone filing for bankruptcy take a credit counseling course, so that folks are not as likely get themselves in the same circumstances that led to their current situation again. But we are still waiting to see whether these courses will actually work for people in the long term.
This article is for informational purposes only. You should not rely on this article as a legal opinion on any specific facts or circumstances, and you should not act upon this information without seeking professional counsel. Publication of this article and your receipt of this article does not create an attorney-client relationship.
