Before you can file for Chapter 7 or Chapter 13 bankruptcy, you will be required to complete a credit counseling requirement. This requirement came about during the bankruptcy law changes in 2005, as part of the Bankruptcy Abuse Prevention and Consumer Protection Act. The reason for the credit counseling requirement is to provide consumers with the knowledge they need to review their debt relief options and learn the tools for better money management practices.
The driving force behind the law changes are twofold: first, it tightened up eligibility criteria to reduce abuse of the system and, second, it increased the protection and education of consumers seeking bankruptcy protection to better equip them for the future. The credit counseling requirement is intended to help educate consumers about debt management, ways to budget and save, and tips for using credit wisely.
In order to proceed with a bankruptcy case, consumers must provide a certificate of completion to the court within 180 days of the initial filing. These courses generally run $50 or less, but consumers are urged to only participate in courses offered by an approved agency. Your Dallas bankruptcy lawyer can help you find a qualified agency to ensure you obtain the right counseling.