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Texas Bankruptcy - Consumer Credit Counseling

If you’re considering Bankruptcy you must complete a Credit Counseling session from a counseling agency approved by the U.S. Trustee Pursuant to 11 U.S.C. § 111.

You may have heard about the changes to the Bankruptcy Laws which became fully effective on October 17, 2005. The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 as it’s called, received a lot of media attention for its provisions affecting consumers. There are changes in the New Bankruptcy Law that now require mandatory credit counseling for debtors. Any consumer eligible and who wants to file for Bankruptcy whether it is Chapter 7 or Chapter 13 Bankruptcy must receive credit counseling from an "approved nonprofit budget and credit counseling agency", either in an individual or group briefing. The intent of the credit counseling requirement under the New Bankruptcy Law is to encourage debtors to pursue non-Bankruptcy Alternatives.

Not all credit counselors are approved for pre-bankruptcy counseling or able to issue the credit counseling certificate required by the Bankruptcy Court. These courses take about an hour or two, and are even offered online.  You may be able to complete it at your attorney's office or at home. 

You do not need to speak to a credit counselor before you speak to an attorney, and if you are told you do, you should not continue to talk to that agency.

The mandatory pre-bankruptcy credit counseling has had little or no impact on eligible Debtors who decide to file for Bankruptcy. The credit counseling requirement has seemed to be a mere formality of limited use that costs $35.00 to $50.00 per person to complete. In the majority of cases, by the time a person starts to think about Bankruptcy as a Debt Relief option, there are seldom any viable non-bankruptcy options that can address their financial problems.

In addition to the pre-bankruptcy credit counseling, The New Bankruptcy Law also requires debtors to obtain post-petition debt education or budget counseling session before they can receive The Discharge in Bankruptcy. This is a second mandatory counseling session will cost you $50.00.  

A significant number of people who seek to file for Bankruptcy Debt Relief are usually motivated by an event such as an upcoming foreclosure or impending repossession. If you are in a pre-foreclosure rush or are facing repossession any moment there are many credit counseling agencies which may not be able to meet the demand in such short notice. The New Bankruptcy Law has a provision that allows a Bankruptcy Filing under an emergency situation without obtaining a credit counseling certificate. The same provision allows a Bankruptcy Filing in situations where credit counseling is not available.

Under the New Bankruptcy Law you are not eligible to file Bankruptcy unless you actually have a certificate from an approved credit counseling agency. It’s best to be proactive and complete your mandatory pre-filing credit counseling as soon as possible before filing as to not have to encounter the potential consequence of a dismissal of your case.

A Credit Counseling session is an informative process about your non-bankruptcy alternatives. There are various ways to complete a Credit Counseling session to obtain a certificate. You can take a session online, in person, and on the telephone depending on the approved company you choose. And, depending on where you live in Texas will determine what Bankruptcy Court District your case will be filed and where you can take your Credit Counseling session.

In summary, The New Bankruptcy Law requires Consumers seeking Bankruptcy relief to take a Credit Counseling session. No individual may be a debtor under Title 11 of the United States Bankruptcy Code unless they have, within 180 days prior to filing, received credit counseling from an "approved nonprofit budget and credit counseling agency", either in an individual or group briefing. Said counseling agencies are to be approved by the U.S. Trustee. (There are exceptions where there is an emergency and the person could not receive counseling within five days, or where the U.S. Trustee has determined that the approved agencies are not adequate to provide the required counseling.) If a debt management plan is developed it must be filed with the court.

For a List of Credit Counseling Agencies Approved By The U.S. Trustees Office Pursuant to 11 U.S.C. § 111 click here or click here.

If you have questions regarding more detailed or specific questions about mandatory pre-filing Credit Counseling contact The Law Offices of R.J.Atkinson,LLC at 800-436-9056 for a free initial consultation to answer your questions about mandatory Credit Counseling under the New Bankruptcy Law. Whether you’re in Houston, San Antonio, Austin, or Dallas, we may be able to assist you in filing for Bankruptcy Debt relief under The New Bankruptcy Law. Don’t lose everything. Call the The Law Offices of R.J.Atkinson,LLC at 800-436-9056 today.

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