The Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) of 2005 amendment to the U.S. Bankruptcy Code imposed additional burdens on debtors filing for bankruptcy protection. BAPCPA includes provisions that require debtors to obtain credit counseling and debtor education as part of the Chapter 7 and Chapter 13 bankruptcy processes.
These classes are not the same as the many questionable debt-relief services advertised to consumers. Rather, the U.S. Trustee Program (USTP) of the U.S. Department of Justice (USDOJ) must approve each course provider, which must comply with USTP curriculum standards.
You can take the classes via telephone or online. The agency is permitted to charge you a reasonable fee for its services, but it must make provisions for individuals whose incomes fall below a certain range – usually on a sliding scale basis. We at Hess & Jendro Law Office, P.A. monitor the courses to refer you to the most cost-effective providers.
You must complete the pre-bankruptcy credit counseling course in the 180 days before you file your bankruptcy petition. Failure to do so can result in dismissal of your bankruptcy petition and forfeiture of the fees you paid to file it.
The credit counseling session is intended to assess your current financial situation and help you decide whether you should file for bankruptcy or have other viable debt-relief options available to you. The instructors are prohibited from offering legal advice about financial regulations or bankruptcy. The pre-bankruptcy credit counseling curriculum includes:
- Financial management
- Consumer information
- Coping with financial crises
The agency issues you a certificate, which we file on your behalf with the bankruptcy court to prove you completed the pre-bankruptcy credit counseling session.
You must complete a second course in debtor education prior to discharge of your debts – within 60 days of the 341 hearing in a Chapter 7 case or before your last payment in a Chapter 13 bankruptcy. The debtor education course is supposed to advise you on making sound financial decisions to avoid unmanageable debt in the future.
Your Minnesota bankruptcy lawyer can advise you on finding the lowest cost, USTP approved agency and on the steps you need to take to successfully complete these two requirements.