As part of the bankruptcy reform in 2005, Congress enacted a provision in the Bankruptcy Code that requires debtors to complete a credit counseling course, also known as a pre-bankruptcy course, prior to filing bankruptcy. Regardless of the reason why a person may need to file for bankruptcy relief, each person must choose a consumer debt counselor to complete the credit counseling course.
In order to ensure uniformity, consumer debt counselors must be approved by the United States Trustee. While there are numerous consumer debt counselors to choose from for the credit counseling course, each company provides the same information and services. The key is to choose the best consumer debt counselor for you.
Factors to Consider When Choosing a Consumer Debt Counselor
Even though all consumer debt counselors must include the same information in their credit counseling course, not all companies are the same. Some companies offer telephone counseling in addition to online counseling while others only offer online counseling. A few companies offer in-person counseling courses for individuals who prefer to attend a course that is taught by a consumer debt counselor in person. Most pre-bankruptcy courses take one hour to 90 minutes to complete. At the end of the session, you will receive a certificate of completion that must be filed with your bankruptcy case.
A credit counseling course covers a variety of topics. You will discuss your income, assets and expenses with the consumer debt counselor. The main purpose of a pre-bankruptcy course is to help you evaluate your financial situation and review your options for resolving your debt problems. Consumer debt counselors are trained to review your financial situation and render an opinion, but this should not replace the advice that you receive from a bankruptcy attorney.
Only a bankruptcy attorney has the knowledge and expertise to help you decide if bankruptcy is your best alternative. If an attorney has advised you that filing bankruptcy is the best option for solving your issues with debt, the consumer debt counselor will likely come to the same conclusion at the end of your credit counseling session.
When choosing a company to provide your credit counseling course, consider the following factors:
Fee for Course
Each provider sets its own fees for the pre-bankruptcy course. Fees for courses range from $10 to $50 or more depending on the company. While it may be tempting to choose the lowest price company, you should first consider the remaining factors such as whether you have access to a “live” person. Most companies that offer courses at extremely low prices only provide on-line access that can create a difficult situation if you have a problem with the course.
As with any service, companies that are just starting to provide a service may still be working on small glitches or hiccups. When a company has been in business for several years, it has had time to streamline its process and develop its materials to make the experience educational, comprehensive and stress-free.
Check with the BBB (Better Business Bureau) for complaints against the company. Review the company’s website – Is the website user friendly? Does the company provide a telephone number you can call to speak with a person should you experience any problems with the course?
Choose a platform that is best for your situation. Some companies provide online courses, telephone courses and live course while others only offer the on-line option. If you are not computer savvy, you may want to choose a company that offers the course by telephone.
Other Factors to Consider
Some other factors to consider when choose a consumer debt counselor include:
- Does the company offer free educational resources?
- Does the company have bilingual certified counselors if needed?
- Does the company charge the same price for individual and joint filings?
- Will you be dealing with a USA-based staff or will you be dealing with a person in another country?
- Will the company waive the fee for the course if you meet certain financial requirements?
- Are the counselors certified or accredited by an outside organization? What training do they have to be a consumer debt counselor?
- Will you have instant access to my credit counseling certificate?
- What are the payment options?
If you have questions about choosing a company for your credit counseling course, ask a bankruptcy attorney for advice. A bankruptcy attorney has likely helped with hundreds of cases before yours, so over time they’ve almost certainly developed a working knowledge of which companies they’ve heard good things about. Pre-bankruptcy courses may sound intimidating; however, the information you are reviewing in the course is the same information you will review with your attorney. Most people find the course to be easy to complete.
For more information about debt solutions, download our free Debt Solutions Comparison Chart. You can get valuable information about various debt solutions that the attorney will discuss in more detail with you during your free consultation.