Credit Counseling and Debtor Education

As a Waco and Killeen bankruptcy attorney, I’ve watched with great interest the changes to the U.S. bankruptcy laws that took effect in 2005. One of the changes that intrigued me the most was the requirement that people attend a credit counseling session before filing bankruptcy and a debtor education course after the bankruptcy case is filed. Credit counseling, in and of itself, is not necessarily a bad idea. However, the creditor counselors can be the problem.

Many Americans find themselves in a financial problem and decide to seek advice from a “credit counselor”. However, the majority of these “credit counselors” are non-profit organizations formed by the credit card companies. They are not legally required to tell you, while they are “counseling” you about your credit cards, that their salaries and expenses are being paid by the credit card industry. If you are seeking relief from your creditors, can you really get an objective answer from a “counselor” who is being paid by your creditors to counsel you?

The credit card industry also convinced Congress to amend the Bankruptcy Code in 2005 to provide that before an individual debtor can file a bankruptcy case, the debtor must participate in a credit counseling session. These pre-bankruptcy “counseling” sessions are an internet program in which the debtors fill in the blanks on an internet form and get a credit counseling “certificate” that they must forward to their bankruptcy attorney before their bankruptcy case can be filed. Many bankruptcy attorneys find this requirement offensive since they have advised the client to file a bankruptcy case and the client must fill out an internet form before the attorneys’ advice can be followed. However, this 2005 “amendment” is easily complied with and is really painless. Our clients complete this requirement in the privacy of their home and this requirement has never had an impact on the ultimate filing of the bankruptcy case.

The credit card industry also convinced Congress to amend the Bankruptcy Code in 2005 to provide that during the bankruptcy case, individual debtors must attend a “Debtor Education” course. At our firm, we think this requirement is a good requirement. Although none of our clients ever intended to file a bankruptcy case, we do think that it is important for our clients to learn how to manage their money so that they do not repeat their financial mistakes. All of our clients fulfill this second requirement by watching a DVD in the privacy of their home filmed by syndicated talk-show host and financial planner Dave Ramsey. Mr. Ramsey has created a very interesting and informative DVD, specifically designed for individuals that have filed a bankruptcy case. Dave’s DVD is required viewing for all of our clients after their bankruptcy cases are filed. Dave Ramsey filed a Chapter 7 bankruptcy case himself in Houston, Texas. He learned a tremendous amount from that experience and his insight gives our clients invaluable tools on how to budget their finances and restore their financial life after their bankruptcy discharge. Best of all, Dave is hilarious! All of our clients really enjoy his DVD course and think it teaches them invaluable tips on how to recover from their bankruptcy filings. Since Dave and his wife also filed a Texas Chapter 7 bankruptcy case, he really knows how difficult it is to conclude that you have to file a bankruptcy case and how to recover financially from that filing.

The cost for both of these courses is included in the fees you pay to our firm. My staff at Erin B. Shank, P.C. will answer all your questions concerning signing up for both of these helpful courses.

If you’re considering bankruptcy, give me a call. I can not only help you fulfill your requirements if you do decide to file; I can also help you explore alternatives to bankruptcy. If bankruptcy isn’t right for your situation, I’ll tell you – I cannot and will not put my needs before yours.

Click here to learn more about how credit counseling can change your life.

Having the right lawyer to represent you is critical to obtaining financial relief as quickly as possible. With my years of experience as a Waco bankruptcy lawyer and Killeen bankruptcy lawyer, I can help you find your way out of debt – without all the hassles of trying to navigate bankruptcy requirements alone.

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