Consumer Bankruptcy Counseling is now available for $5 from the website: www.consumerbankruptcycounseling.info. In 2005, Congress required all individuals wishing to file bankruptcy to first undergo a “Credit Counseling Briefing.” This counseling session is supervised by the office of the US Trustee and must be completed within six months prior to the bankruptcy petition date. Credit counseling is supposed to be done by an approved non-profit agency but can be conducted online over the Internet.
Bankruptcy credit counseling takes about an hour and is now a primarily automated process. The standard fee charged by most authorized credit counselors is between $30 and $50. “Nonprofit” credit counseling has become a big business with agencies competing with each other for business from bankruptcy lawyers. Promotional gifts are given out at bankruptcy lawyer conferences and parties are sponsored to curry favor with lawyers to seek client referrals.
Credit counseling itself is an enormous waste of both money and time. It is often described as a “speed bump” in the road to bankruptcy relief. In the more than six years since the implementation of this requirement I have not had a single client change their mind about a bankruptcy filing due to the credit counseling they attended. However, they have spent thousands of dollars paying for this worthless and wasteful “service.”
The Tides Center, a non-profit organized in the California Bay area, is now providing this service to all who need it. The $5 cost is charged to help fund the program and to overcome skepticism that arose when the program was initially proposed without charge. The low cost does come with some minor delay in issuance of the required certificate. They do not provide same day service and there are no operators “standing by” on a toll free line to handle technical problems. However, after using the service for a few months now, my office has experienced no unexpected problems and there are no client complaints about the price.
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