Additional burdens were put in place after the bankruptcy laws were changed claims Bannockburn bankruptcy attorney. The other burdens that the new law put in place were the credit counseling requirement, the financial management requirement and the production of tax returns and pay advices. For every case filed under the Bankruptcy Code after the law changed, that individual must have submitted to a credit counseling session. A credit counseling session is a one-hour session that can be done over the phone, in person or over the Internet with a credit counselor approved by the United States Bankruptcy Trustees Office. The credit counseling is simply an interview with a credit counselor based on your income and your expenses. The credit counselor will also ask you about your assets and your liabilities and they will talk about possible alternatives to bankruptcy. They will put the idea of avoiding bankruptcy into your head.
Unfortunately for the credit counseling agencies and the lobbyists that passed this law, people are not opting out of bankruptcy and going for some sort of debt settlement plan. It just isn’t happening that way, folks. People who go to credit counseling because they need to file bankruptcy and are being sent there by their bankruptcy attorney. So it is not until they have already met with their bankruptcy attorney and the bankruptcy attorney directs them that they must take this credit counseling session that they actually sign up for the credit counseling session.
I have yet to have one client since the law changed back in 2005 that I sent to a credit counseling session that later came back to me and said I no longer want to file bankruptcy. I’m going to handle it a different way. The simple fact is that people are taking the credit counseling because it is mandated, it is necessary and it is a hoop that they need to jump through or a hurdle that they need to jump over. This credit counseling comes at a cost in terms of money, approximately $25-$50 and time which is approximately one hour. There’s also a certificate that needs to be prepared by the credit counseling agency and then it must be filed by the bankruptcy lawyer for the US Bankruptcy Court.
So we have a lot involved here between taking the class, getting the certificate, paying the money, filing it with the court that did not need to be done before the laws were changed. That is a significant burden on an individual who was trying to get a fresh start, that they must submit to a credit counseling session that will just tell them that they need a fresh start.