Non Profit Consumer Credit Counseling Service


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Non Profit Consumer Credit Counseling Service

Non Profit Consumer Credit Counseling Service

In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act amended the U.S. Bankruptcy Code not only by changing the eligibility requirements for consumers seeking bankruptcy relief under both Chapter 7 and Chapter 13, but also limited the circumstances under which these individuals could be granted a discharge by requiring that each debtor undergo government approved pre-bankruptcy credit counseling before any debts could be discharged through bankruptcy.

How Pre-Bankruptcy Credit Counseling Benefits Consumers

Although finding a government approved credit counselor is often a hassle for consumers who don’t want to face the additional costs of credit counseling in addition to bankruptcy fees and attorney fees, the pre-bankruptcy credit counseling requirement was designed to benefit consumers in the following ways:

  • Credit counselors can help a consumer avoid bankruptcy by negotiating payments with his creditors that he can afford.
  • Credit counselors can inform individuals of alternate options, such as debt settlement, that a bankruptcy attorney is unlikely to mention.
  • Pre-bankruptcy credit counseling teaches vital debt management skills to consumers that help them avoid additional debt problems in the future.

How Pre-Bankruptcy Credit Counseling Benefits Creditors and the Court

Consumers aren’t the only ones who benefit from the pre-bankruptcy credit counseling requirement. The regulation also holds money-saving benefits for the U.S. court system and creditors.