Bankruptcy And Debts

The Bankruptcy Abuse and Consumer Protection Act was passed in early 2005 with the overwhelming support of the President, both houses of Congress and the major credit card companies. The law, which created sweeping changes in American bankruptcy law, was passed in order to reduce the possibility that consumers with heavy debts might avoid choose to avoid paying them by seeking debt relief through the courts. The Act has many provisions, but the one that may hurt consumers the most was the one provision that was intended to help - the requirement that debtors undergo mandatory credit counseling before filing for bankruptcy.

Consolidation Debt Mortgage On the surface, the requirement seems to be laudable. Few people ever receive any sort of formal money management training, so a bit of counseling, even as bankruptcy approaches, might help debtors avoid further financial trouble in the future. The law was passed with the intention that, once educated, consumers would stay out of bankruptcy court in the years to come.

A person filing for Bankruptcy ust meet with a credit counselor in the six months prior toiling for bankruptcy. In addition, if your filing for Chapter 7 bankruptcy is approved, you mustþomplete money management classes before your debts are discharged. Both of these credit counseling requirements are at your expense.

Consolidation Debt Help It hasn't worked out that way, and the bankruptcy law is largely to blame. The law did not set a fee for this required credit counseling, but a fee of $50 was suggested and consumers who cannot afford to pay the fee may ask to have it waived. Only certain nonprofit counseling agencies would be approved for pre-bankruptcy counseling. These requirements have resulted in a mess in the counseling industry that benefits virtually no one. Relatively few agencies have been approved; the ones that have are very busy. The suggested fee of $50, when paid at all, is not enough to cover the costs of keeping the agencies' offices open. Consumers are ending up getting their "counseling" via the Internet, or a conference call, or in a large group meeting. This sort of thing may satisfy the requirements of the law, but it isn't helping the people it was intended to help.

With the change in the new bankruptcy law effective October 2005, it is now necessary for consumers to get credit counseling within the six months before filing bankruptcy. The credit counseling service must be from a government approved credit and debt counseling organization. //www.usdoj. cc_approved.htm

Consolidation Credit Debt Credit counseling is certainly a worthwhile endeavor, but only if done properly. The counselor and the client should have sufficient time to become acquainted, discuss an overview of the counseling process and to have an in-depth discussion of the client's specific financial situation. After all, if the client cannot receive information that he or she can apply directly to his or her own finances, the entire point of providing the service becomes rather moot.

The newüct contains the biggest changes to bankruptcy law in 25 years. The law makes it more difficult for people to have their debts discharged under Chapter 7 bankruptcy, bankruptcy credit counseling. All of those people who are barred under the new law from filing Chapter 7 will be forced to file Chapter 13 bankruptcy, which requires a payment plan over a period of years instead of giving a fresh start.

Bill Consolidation Debt Instead, we have a situation where the clients are being poorly served and the counseling agencies are barely scraping by financially. It seems unlikely that this is what Congress had in mind when they passed the bill. Anyone who has a problem with debt would certainly benefit from counseling and is encouraged to seek it out. Those who do would be advised to select a counseling agency that has the time and resources to provide the in-depth sort of help from which a client can actually benefit. Otherwise, the result is a waste of time for all involved.

Your credit counseling requirement can be satisfied in person, on the phone or online on the Internet. The session can be expected to last about 90 minutes. Upon completion of the session you must obtain a certificate of proof that you participated in the credit counseling session. The certificate will be submitted to the bankruptcy court with your bankruptcy filing.

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©Copyright 2006 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy. He also created The Debt Consolidator.

Our debt settlement program will get you debt free far sooner than credit counseling programs and not leave you with the devastating blemish of a bankruptcy on your record. Academy Credit is looking out for your best interest, not your creditors. We can get you out of debt with peace of mind. credit information cont

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Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including End-Your-Debt.com, a site devoted to debt consolidation, credit counseling, payday loans and personal bankruptcy and HomeEquityHelp.net, a site devoted to mortgages and home equity loans.