Mandatory Credit Counseling for Those Considering Bankruptcy

Most Americans are aware of the sweeping changes in U.S. bankruptcy law that were made by United States Congress recently. These changes, strongly supported by the credit card industry, were designed to do it more than hard for Americans to register for bankruptcy under Chapter 7 of the Federal Soldier bankruptcy code. Chapter 7 allows consumers to essentially have got all of their debts wiped away by the court. While many people volition still be able to register under Chapter 7, many more than will have got to register under Chapter 13, which necessitates the constitution of a repayment plan. A less publicised proviso of the bankruptcy measure is the 1 that necessitates debtors who are considering filing for bankruptcy to first experience credit counseling. What makes this mean value for consumers?

Actually, the inside information are not yet known. The law, which takes consequence on October 17, 2005, makes necessitate that debtors considering bankruptcy have credit counseling at least six calendar months before filing for bankruptcy. The law also necessitates that they have further counseling before the lawsuit is finalized and that any agency providing counseling services must charge an vague “reasonable fee.” Other than that, there are no inside information yet. The part of the law that deals specifically with credit counseling hasn’t yet been written, and the full inside information are not expected to be released until mid-summer. Even those who work in the credit counseling industry make not cognize what will be expected of them once the law takes effect.

For consumers with problem debt, this confusion is only making a bad state of affairs worse. In the Fall, more than stairway will be required of those filing for bankruptcy, but no 1 cognizes what those stairway are, what they will cost, or how involved they will be. Anyone who have a current financial state of affairs that they experience may lead to bankruptcy would be well advised to see filing now. Bankruptcy should be considered a last vacation spot for those with problem debt, as a bankruptcy filing will remain on a credit report for at least 10 years. If bankruptcy looks inevitable, however, filing now will probably be easier, cheaper, and faster than filing after the new law takes consequence in October.