Consumer bankruptcy counseling is now available for just $5 in the Spanish language at consejeriadebancarrota.com Federal bankruptcy law requires debtors to complete a course and obtain a credit counseling certificate within six months before filing. This is another hurdle for a debtor to cross that often costs $20 to as much as $50. This requirement was added by Congress in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Some, but not all services provide counseling in Spanish.
A leader in the “Credit Counseling” field is a non-profit in the California Bay area operated by the Tides Center. Their website, consumerbankruptcycounseling.info has been only offered in English until the debut of their new website. Now, Spanish speaking debtors can receive Consejería de Crédito (credit counseling) in their native language.
Ever since congress began requiring individual debtors to undergo this pre-bankruptcy counseling, codified in 11 USC §109(h) there have been questions about the true need for this exercise. In theory, it was intended to foster reflection in the debtor who may only need some help with their budget and could avoid bankruptcy with the proper instruction. Most bankruptcy lawyers, including this author, believe it was intended to foil attempts by some debtors to file.
After 7 years of experience with the counseling requirement, I have not once had a client come to me for help and change their mind about filing a bankruptcy after they review their finances with a credit counseling agency. It just does not happen. From my perspective it is a waste of money and has resulted in the growth of an entire industry created to prey on the financially downtrodden. It provides no help to the debtor other than assisting them to comply with federal law.
The people who run these bankruptcy counseling agencies are nice to me and my clients and give out nice little gifts at trade shows. They are not responsible for creating the requirement. But, many of them have become entrenched in the business and rely on it for their economic livelihood. It is in their financial interest to continue the requirement; even though most of them admit it is of no benefit to the debtors.
Image courtesy microsoft clipart
- Log in to post comments