First let me say that the entire idea of requiring consumers to have to get a pre-bankruptcy credit counseling certificate in order to file bankruptcy is ridiculous. It was ridiculous in 2005 when they passed the law, it’s ridiculous today.
The requirement for people to complete some mandatory pre-bankruptcy counseling class was originally supported by credit counselors that were hoping consumers would be driven to them and they could instead persuade them to enter their credit counseling debt management plan instead. But people heading into bankruptcy are not good candidates for a credit counseling solution. The plan backfired, as was predicted. The conversion rate from pre-bankruptcy counseling to a debt management plan is horribly low.
So thanks to bankruptcy law changes created by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 consumers are now required to get a certificate showing they have completed a pre-filing bankruptcy class. Prices for these classes have been as high as $50 but a site a reader just tipped me off about is charging only $5 for this required bankruptcy certificate of counseling.
According to the ConsumerBankruptcyCounseling.info website the reason the cost can be so low is because:
Th[e] website is provided as a public service by ConsumerBankruptcyCounseling.info. Due to the voluntary donations from the public, and more specifically, members of the commercial bankruptcy bar throughout the United States, the counseling service is FREE OF CHARGE. To begin your FREE pre-filing Credit Counseling session and obtain your Certificate(s) of Counseling for $5 per certificate, please click here. – Source
According to the U.S. Trustee Program under the Department of Justice, the website is an approved agency and a Project of the Tides Center at 1014 Torney Avenue San Francisco, CA 94129 www.tidescenter.org.
And if you can’t afford the $5 fee for your pre-bankruptcy credit counseling class, you can get the fee waived if you meet the following requirements:
If your income is less than 150% of the applicable level for the number of persons in your household and state of residence, the fee will be waived. Charts showing the applicable poverty level and family size are provided on the website. If your income exceeds the applicable level but you still feel your circumstances create a special hardship you can request consideration on a case-by-case basis. – Source
The only downside of this pre-bankruptcy credit counseling class, like that offered by any other provider, is that it will take ONE HOUR of your life you will never get back again. The website does NOT allow you to ADVANCE through the counseling sections until the allotted time has passed. And why can’t you complete any pre-bankruptcy counseling session faster? It’s the law.
Pursuant to Section 58.15 of the Interim Final Rule put out by the Executive Office for the United States Trustee, Department of Justice, Agencies and credit counselors shall provide briefings, budget analysis, and credit counseling services to clients lasting an average of 60-90 minutes in length. Because this site’s goal is to allow you to complete the counseling requirement online and receive your Certificate of Counseling, there is a mechanism in place that will prevent clients from moving from section to section too quickly. – Source
Oh yes, and you have to invest the time it will take you to gather the following information for any pre-bankruptcy counseling class.
- Tax returns from the last year you (and your spouse, if applicable) filed.
- Assets: All recent financial account statements such as statements for checking/savings accounts, stocks, mutual funds, retirement accounts, etc.
- Income: Copies of your (and your spouse’s) paystubs, gross receipts for businesses, statements of real property income, pension and retirement income, unemployment compensation, social security benefit letters, alimony, child support, etc. which accurately reflect your average monthly income.
- Expenses: Mortgage statements, car loan statements, student loan payment stubs, utility statements, phone bills, water/garbage bills, statements for all other regular monthly expenses such as child care receipts, tuition payments, etc.
- Recent credit card statement for each card, recent medical bills, unsecured loan statements, repossession/foreclosure notices, all lawsuits, judgments, garnishment amounts per month, etc.
So listen, if you have to absolutely waste a part of your life to complete a silly bankruptcy credit counseling class to get your bankruptcy certificate before you can file bankruptcy, hey, why not consider using the least expensive I’ve ever seen.
Bankruptcy Articles and Posts You Must Read
To get ready to read the information below with the right frame of mind, please first read How Do I Get Out of Debt Quickly? Change Your Mindset.
- Those That File Bankruptcy Do Better Than Those That Don’t
- How to Know if You Should File Bankruptcy
- So You Are Going to File Bankruptcy. That’s Great News. Congratulations.
- Easily Rebuild Your Credit After Bankruptcy
- The Truth About Bankruptcy Success Rates
- How to Get Out of Debt Calculator
- How Avoiding Bankruptcy Can Backfire
- How Long After Bankruptcy Can I Buy a House?
- Is Bankruptcy Sinful and Bad or Right and Moral? An Examination
- What Does the Bible Say About Bankruptcy? Is Bankruptcy Scriptural?
- How to Get Out of Debt. The Honest and Unvarnished Truth
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- Chapter 7 Bankruptcy – What is the Truth?
- Low Cost / Pro Bono Bankruptcy Resource Locator
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- The Ethical Considerations of Bankruptcy
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- 14 Reasons You Should Not Avoid Bankruptcy
- How to Really Discharge Your Student Loans in Bankruptcy. Many Can. But Never Try.
- Life After Bankruptcy: How to Quickly Have Great Credit and Dumb Mistakes to Avoid
- How to Find a Great Bankruptcy Attorney
- You Have Not Failed if You File Bankruptcy
- The Saddest Avoidable Mistake People Make When Getting Out of Debt
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- How to Rent a Lovely Home or Apartment After Bankruptcy
- Life After Bankruptcy – The Truth
- How to Easily Rebuild Your Credit and Have Good Credit Again After Bankruptcy