Mounting bills can put stress on any family's budget, but when there isn't enough income coming in to pay off those debts, late bill payments are inevitable. If you find yourself facing insurmountable debt and bankruptcy appears to be your only option, contactan experienced bankruptcy attorney to discuss your options.
At the law office of William F. Davis & Associates, P.C., our lawyers have been assisting business owners and consumers throughout New Mexico solve their debt challenges and get back on the path to financial success since 1984.
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Read more general legal information about bankruptcy below.
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Bankruptcy Attorney William F. Davis has owned a number of businesses and has extensive understanding of financial issues from a personal and professional standpoint. He is also one of only a few certified legal specialists the area of bankruptcy law in New Mexico. Contact us for a free initial consultation.
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Credit Counseling Requirement in Bankruptcy
In 2005, Congress passed and President George W. Bush signed the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA), a bankruptcy reform law. One of the new requirements BAPCPA imposes on a 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 at William F. Davis & Assoc., P.C. in Albuquerque, New Mexico, can help debtors determine whether bankruptcy is the appropriate course of action for them and can advise them about the credit counseling requirements.
Specifically, the BAPCPA requires that 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, but it 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 once the bankruptcy proceeding has begun.
Approved credit counseling agencies
In most states, the U.S. 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 instead of trustees. The list of approved agencies is available on the U.S. courts website. Approval can be revoked at any time, and 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
- 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.
Speak to a bankruptcy lawyer
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 William F. Davis & Assoc., P.C. in Albuquerque, New Mexico, can provide much-needed information about credit counseling and bankruptcy filings.
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