Credit Counseling Requirement Before Filing Bankruptcy


One of the changes made to the Bankruptcy Code in 2005 was the addition of a requirement to take a credit counseling course before filing a bankruptcy case. The theory behind this requirement was that if people just knew how to prepare a budget and live within their means, fewer people would have to file bankruptcy. This was a simplistic and frankly insulting assumption by the lawmakers who passed this legislation. Most bankruptcy cases are filed as the result of some life-changing event, such as a job loss, divorce, or serious illness. However, the requirement is not overly burdensome, thanks to many companies who have set up online or phone classes that can be accessed 24 hours a day.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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