3 Considerations Regarding Credit Counseling and Bankruptcy
In 2005, the bankruptcy law in the United States added several requirements for Chapter 7 bankruptcy filers. Through a law known as the Bankruptcy Abuse Prevention and Consumer Protection Act, debtors seeking Chapter 7 bankruptcy protection are now expected to fulfill two new requirements. The first is to pass a means test, gauging the debtor's income against the state average and assessing the resulting ability to pay one's debts. The other is going through credit counseling before filing for bankruptcy.
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If you are facing overwhelming debt, you may benefit from filing for bankruptcy. It is highly suggested that you get in contact immediately with an experienced and knowledgeable bankruptcy attorney to explore your options and get on the path to financial freedom.
Different Points of Concern
The provisions of BAPCPA establish certain exceptions for the credit counseling requirement. The following will help you to determine whether these may apply to your situation.
You Have to Go Through Credit Counseling for Chapter 7 or 13 Bankruptcy
The aim of the 2005 legislation was to reduce the perceived abuse of Chapter 7 bankruptcy, or liquidation bankruptcy. However, the requirement for credit counseling stands for both Chapter 7 and 13 bankruptcy cases. A person needs to file proof of credit counseling within 180 days of filing for bankruptcy.
Active Military Personnel May Be Exempt
There are two major exemptions for credit counseling. One is allowed for military service members currently deployed in an active deployment zone. Once a military service member becomes an active part of a live operation in the field, they are considered exempt during that time to file a credit counseling certificate.
Physically and Mentally Disabled Debtors May Be Exempt
The other major exemption is available for the disabled. This is, in part, because some disabled debtors may not benefit from counseling. After all, many of these debtors needed to take out so many loans and other financial obligations for treatment, which is not generally a cost that can be negotiated or brought down.
If you are facing difficult financial troubles you need to seek credit counseling immediately. There is hope for you and help out there. With millions of people filing bankruptcy each year, you are not alone.
If your debt has grown out of control and you need a powerful solution to handle those obligations, bankruptcy may be the right choice for you.
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