What is credit counseling and why it is required?

First of all credit counseling is not that difficult and can be done via our office (Law Office of Malik Ahmad) where we can send you links to do these courses online. These counseling requirements were enacted pursuant to the bankruptcy reforms in 2005; Congress passed the “Bankruptcy Abuse Prevention Consumer Protection Act”. It is a mandatory requirement under this Act, and every consumer unless exempted by the bankruptcy court, has to file these certificates. As of this time, and after five years, we do not know if it has increased or decreased bankruptcy and whether it has effectively increased knowledge of bankruptcy seekers.

It is mandatory for an individual to first take a credit counseling and budget course and file his certificates before filing for chapter 7 bankruptcy. This course has to be completed within 180 days of filing of bankruptcy. This course is available on-line, by telephone or in person. It is provided by not-for-profit organizations or agencies which are approved by the Office of the United States Trustee. These courses are provided in English as well as a number of foreign languages…
Generally speaking this credit counseling session could take between an hour and two hours. It is not a bad course, and one can learn lots of things from it. People who files bankruptcy is not good in accounting and budgeting and of course the math skills. This course may teach them how to live within their means and of course balance their budget. However, this course alone would not be sufficient, one need to supplement this by reading good financial articles and watching good financial programs on TV. A habit must be developed to read the financial news and apply to yourself. You also need to sit down with your spouse and develop a budget. Again, it is good idea to do online accounting and pay your creditors and the utility bills to have a complete record and print them when you need them. You’ll have to be patient. You’ll have to develop your budget and examine all your bills. Both husband and wife need separate credit counseling certificates – make this is a family activity.

Credit counseling can cost anyplace from $30 to $75 depending on the agency. Our law office has developed links with some of the credit agencies where you do not have to go in person; rather you can simply take courses online. The price is generally $50.00 per class. If you can’t afford it, ask them, and maybe they forego the price for such counseling certificates. There are also some nonprofit agencies working in this sector. A $50 dollar counseling certificates should not be too much for someone filing bankruptcy and looking forward to stop his/her responsibilities for a mountain of debt.


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