As a Lincolnshire bankruptcy attorney, I had believed that shortly after the bankruptcy laws had changed that they would start to reduce some of the requirements on the credit counseling. As it turns out there was one major change to credit counseling which took place about one year ago. Under the Bankruptcy Code it states that the credit counseling session must be completed within 180 days prior to filing a bankruptcy. This means that if a person takes the credit counseling session but does not decide to file right away, they may actually have to take that credit counseling session again. There was also an issue on whether one calendar date had to pass between the credit counseling session and the bankruptcy filing. Technically the way the Bankruptcy Code was originally written, it appears that if someone took the credit counseling on one day they would have to wait till the next calendar day to actually file their bankruptcy case. This was the case under the many types of bankruptcy.
Thankfully, this situation was modified under the bankruptcy laws in a future amendment which basically said that the credit counseling session does have to be completed within 180 days of filing; however, it doesn’t need to be one calendar day between the taking of the course and the filing. Thus, I can have a person come into my bankruptcy office, take the credit counseling over the phone on the spot, and once the credit counseling has been completed, I can then file their bankruptcy case all in one fell swoop. So now we don’t even have a waiting period or a cooling off period where someone could gather the information from the credit counseling session and think about it for a day before they file bankruptcy. Basically the credit counseling now has completely made itself useless in terms of getting people to not file for bankruptcy.
And where did Congress think the credit counseling would be found by the bankruptcy client? Well, of course, the credit counseling was found out by the bankruptcy attorney who sent the client to the credit counseling to fulfill the statutory requirement. People were not seeking out credit counseling in lieu of bankruptcy prior to going to their bankruptcy attorney. People are doing credit counseling because they have to do so in order to get the relief that they seek. The credit counseling requirement simply takes money out of the debtor’s pocket and takes time away from his or her life simply in an effort to get a bankruptcy case file.
I would suggest that Congress and the bankruptcy lobby and the credit card industry realize that the credit counseling session is nothing more than a burden on the system, a burden on the debtor, a burden on the court, and a colossal waste of time. However, credit counseling is mandated by the Bankruptcy Code, and we will continue to send our clients to bankruptcy credit counseling in order to be eligible to file a Chapter 7 or to file Chapter 13 bankruptcy under the United States Bankruptcy Code.