Bankruptcy — just the sound of it evokes strong feelings in most people. Although filing for bankruptcy is rarely anyone's first choice when trying to cope with overwhelming debt, the decision to file for bankruptcy can be the right one when made with full awareness of all its consequences. Contact an experienced bankruptcy lawyer to discuss your options.
What You Need to Know about Bankruptcy
Provided by the Law Offices of H. Frank Cahill, in Anchorage, Alaska
If you are considering seeking personal bankruptcy protection, you may be uncertain of your rights, particularly in light of the revisions Congress made to the bankruptcy laws in 2005. The information on this page, is designed to answer your basic questions. For experienced representation in bankruptcy matters, contact the Law Offices of H. Frank Cahill or call our office at 907-222-4905 to set up an appointment.
To learn more about our bankruptcy practice, visit our Chapter 7 bankruptcy page or our Chapter 13 bankruptcy page.
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Contact an experienced personal bankruptcy lawyer! At the Law Offices of H. Frank Cahill, in Anchorage, we have handled consumer bankruptcy filings since 1995. We have a comprehensive understanding of the law and process, including the recent revisions to the bankruptcy laws, and will help you take the steps necessary to use a Chapter 7 or Chapter 13 filing to get a fresh start.
Protecting your personal bankruptcy rights since 1995. At the office of attorney H. Frank Cahill, in Anchorage, we handle all matters related to Chapter 7 or Chapter 13 bankruptcy filings, preparing all the required documents and acting as your advocate in meetings with creditors, the bankruptcy trustee or the court. Contact our office to schedule an appointment.
Credit Counseling Requirement in Bankruptcy
In 2005, Congress passed and the president signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a bankruptcy reform law. One of the new requirements BAPCPA imposes on a new bankruptcy debtor is to receive credit counseling from an approved credit counseling agency before the bankruptcy filing. A bankruptcy lawyer experienced in consumer credit law, like one from Law Offices of H. Frank Cahill in Anchorage, Alaska, can help debtors determine whether bankruptcy is the appropriate course of action for them and can advise them about these new counseling requirements.
Credit Counseling Briefing
Specifically, a debtor must receive an "individual or group briefing" from a nonprofit budget and credit counseling agency within 180 days before filing for bankruptcy. The briefing can be in person, by telephone or via the Internet. The law provides that the briefing must "[outline] the opportunities for available credit counseling and [assist] such individual in performing a related budget analysis." If a debt management plan is developed in the course of the required counseling, it must be filed with the bankruptcy court.
Approved Credit Counseling Agencies
In most states, the US trustee maintains a list of approved credit counseling agencies for use in the court districts in those states. In Alabama and North Carolina, this list is approved by bankruptcy administrators. The list of approved agencies is available on the US courts Web site. An approved agency is first on the list for a six-month probationary period, renewable in one-year increments. Approval can be revoked at any time. Interested persons can ask the court to review the approval of any agency.
To obtain approval, an agency must have qualified, experienced counselors who provide adequate counseling and have no financial interest in the counseling outcome; handle client funds securely; maintain an independent board of directors; charge reasonable and sliding scale fees; make certain disclosures; possess financial security to oversee repayment plans of clients; and maintain "quality, effectiveness, and financial security of the services it provides."
Exceptions to the Credit Counseling Requirement
There are some exceptions to the counseling requirement for certain debtors in particular situations. First, the court may waive the counseling requirement if there are "exigent circumstances" and the debtor made a request for counseling that an agency was unable to provide within five days. Second, a debtor is excused from the requirement if incapacitated by mental illness or deficiency, if physically impaired such that he or she is unable to participate with reasonable effort or if on active military duty in a combat zone. Third, counseling is not required if the trustee or administrator in a particular court district determines there are not enough approved credit counseling agencies available.
Criticisms of the Requirement
The credit counseling requirement has many critics. One argument is that it is too little and too late for a debtor in bad enough financial shape to be on the brink of bankruptcy. Supporters of the requirement feel that it will weed out people who are in financial crisis because of their own voluntary behavior; however, counseling agencies have found that most people counseled have had legitimate problems not caused by their own recklessness. Dismissal of a bankruptcy case for not obtaining required counseling is seen by some as harsh treatment for a debtor facing, for example, foreclosure on a modest home. Finally, depending on the interpretation of the judge, the dismissal could weaken the automatic stay in a subsequent bankruptcy filing.
Conclusion
Consumers considering bankruptcy as a future option should investigate the credit counseling requirement well before the anticipated bankruptcy filing. The experienced consumer and bankruptcy law attorneys at Law Offices of H. Frank Cahill in Anchorage, Alaska, can be just the counselors and zealous advocates such a consumer needs in trying economic times.
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